What is the refinancing Fast Track process?

In your refinancing research, you may have come across terms like Fast Track refinancing or FastRefi, referring to a specific type of refinancing that allows the borrower to get their new loan settled in as little as three days if no physical property valuation is required. Compared to the average refinancing time of 21-30 days this is significantly shorter.  

But what makes this process so fast? And is it always a good option for all borrowers?

The Fast Track refinancing process can be relatively short because a prospective lender agrees to take on your existing debt before the title of the property is transferred to them. This cuts out the time-consuming back-and-forth between your old and new lenders that would usually occur before settlement.

During the standard refinancing process, your new lender will wait for your old lender to transfer the title to your property to them before taking on your debt. This way, your new lender has a legal right to sell your home if you cannot repay your debt. In the Fast Track process, your new lender trusts that you will not default on the loan before they have the legal means to recoup their loss.

As this means your new lender is taking a risk, they may ask you to pay some form of title insurance that will cover their loss if you were to default on the loan before they get their hands on the property title. Some lenders may cover this insurance fee as an incentive to encourage you to switch lenders.  

Borrowers who are switching to a lower interest rate may find the Fast Track option particularly attractive as it can allow them to start paying less for their loan as soon as possible. The faster the switch is completed, the sooner the savings will start appearing in your own pocket rather than your old lender’s. This can shorten the time it takes to break even on the refinancing costs and start stashing away the savings that come with a lower monthly repayment.

It also means that the refinancing process will not drag on for weeks or months, giving a borrower peace of mind that the switch is completed and doesn’t require following up.   

The main reason the Fast Track refinancing process may cost you extra is if you must pay the title insurance fee to cover the lender. If you will have to pay this charge, it is worth recalculating your break-even point to see if getting the discounted interest rate early will help pay off the extra fees you will be charged.

Several Australian mortgage lenders offer fast refinancing options, including but not limited to:

• ANZ
• Commonwealth Bank
• Westpac (and its subsidiaries)
• loans.com.au
• MyState Bank
• Suncorp

If you are interested in a loan from another provider, you can contact them to ask if they offer a fast refinancing option.

Your personal circumstances will also affect your eligibility for this process, so make sure in this initial contact you are prepared to discuss your current financial situation.