Smart ways to refinance multiple properties

When refinancing several properties makes sense

Refinancing multiple properties at once can reduce your total monthly repayments and give you access to equity that might otherwise sit untouched. If you hold more than one property and your circumstances have changed since you first borrowed, a loan review across your entire portfolio often reveals opportunities to improve cashflow or consolidate debt.

Consider a parent who purchased a home years ago, then kept it as an investment property when relocating for work or family reasons. That original loan might still carry the rate it was locked in at years ago, while the current home loan was taken out more recently. Reviewing both loans together can highlight where one property is paying too much interest, or where equity in one could help reduce reliance on costly personal debt.

The decision to refinance more than one property at the same time depends on how much you stand to save and whether the timing aligns with your fixed rate period ending. If one loan is coming off a fixed rate while another still has two years to run, you might refinance the first now and plan the second for later. If both are on variable rates or both are approaching expiry, moving them together can reduce the number of applications and valuations you need to manage.

How lenders assess applications for multiple properties

Lenders calculate your borrowing capacity by looking at total income, total debt, and total living expenses across all properties you own. When you refinance multiple properties, each loan is assessed individually, but your serviceability is measured as a whole.

This means that if you already have two or three loans, adding another application does not automatically double your chances of approval. Instead, the lender checks whether your income can support the combined repayments after accounting for rental income, offset by a buffer for vacancies and interest rate changes.

Rental income is typically assessed at around 80% of the actual amount to account for periods when the property might sit empty. If one of your properties generates rental income that covers most of its repayment, that strengthens your position. If both properties are negatively geared and you are covering the shortfall each month, the lender will factor that cost into your overall expenses.

Consolidating personal debt into a mortgage refinance

If you are managing credit card balances, car loans, or personal debt alongside multiple property loans, refinancing can create an opportunity to consolidate that debt into one or more of your mortgages. This approach can reduce your total monthly outgoings and improve cashflow, but it only works if the numbers support it.

Consolidating debt into your mortgage means you are moving short-term, high-interest debt into a longer loan term at a lower interest rate. While this reduces your monthly repayment, it can increase the total interest paid over time if the debt is spread across a 25 or 30 year period. The trade-off is immediate relief in your budget versus the long-term cost of carrying that debt.

In a scenario where a single parent has two properties and is carrying a car loan and a credit card balance, refinancing both properties to access equity and pay out those debts might reduce monthly commitments by several hundred dollars. That additional cashflow can make a material difference when managing school fees, childcare, or unexpected expenses.

Using equity from one property to support another

If one of your properties has increased in value since you bought it, you may be able to access equity during a refinance to pay down debt on another property, fund improvements, or create a financial buffer.

Equity is the difference between what the property is worth and what you owe on it. Lenders will typically allow you to borrow up to 80% of the property's value without needing to pay lender's mortgage insurance. If your property is worth more now than when you purchased it, that increase in value can be unlocked and used elsewhere in your finances.

As an example, a parent who owns an investment property that has grown in value might refinance that loan to access equity, then use those funds to reduce the balance on their main home loan or pay out other debts. This approach can reduce the overall interest paid across both loans and improve cashflow by lowering the repayment on the higher-balance loan.

It is worth noting that accessing equity increases the loan amount on the property being refinanced, which in turn increases the repayment on that loan. The benefit comes from how the equity is used and whether it reduces higher-cost debt or supports other financial goals.

What happens when one loan has a fixed rate period ending

If one of your properties is coming off a fixed rate and reverting to a higher variable rate, that is often the trigger to consider refinancing. Many borrowers lock in a fixed rate during a period of low rates, then find themselves facing a significant jump in repayments when the fixed term ends.

When your fixed rate period is ending, you have the option to negotiate a new rate with your current lender or move to a new lender altogether. If you hold multiple properties, this is also a useful time to review the other loans in your portfolio, even if they are not due for renewal.

Moving one loan while leaving others in place is common, but if the other properties are also on older rates or lack features like offset accounts or redraw, it might make sense to refinance them at the same time. This consolidates your application process and gives you a clearer view of your overall position.

Structuring loans to match income and tax outcomes

When you own both a home and an investment property, how the loans are structured can affect your tax position and cashflow. Interest on an investment loan is generally tax-deductible, while interest on your home loan is not.

If you have accessed equity from your home to fund a deposit on an investment property, the portion of the loan used for investment purposes may be deductible, while the portion used for personal purposes is not. This is where loan splits and careful structuring become important.

During a refinance, you can separate the loans so that the investment portion is clearly defined, making it simpler to claim deductions and manage your finances. If you have been using redraw on an investment loan for personal expenses, that can blur the line between deductible and non-deductible interest, which is something to address during the refinance process.

The application process when refinancing more than one loan

When you apply to refinance multiple properties, the process is similar to refinancing a single loan, but with additional documentation and potentially more than one property valuation.

You will need to provide income verification, details of all your current loans, and information on rental income if applicable. The lender will order valuations for each property being refinanced, and those valuations determine how much equity is available and whether the loan-to-value ratio meets the lender's criteria.

If you are refinancing with the same lender, they may waive or reduce some of the valuation costs, but if you are moving to a new lender, you should expect a valuation for each property. These costs are usually payable upfront, though some lenders will add them to the loan balance.

The timeline for refinancing multiple properties is generally a few weeks longer than a single loan refinance, as there are more moving parts and more documents to coordinate. If the properties are in different states or have different tenancy arrangements, that can add to the time required.

Why working with a broker can save time and reduce errors

When refinancing several properties, the number of variables increases quickly. Different loan balances, different rates, different lenders, different fixed terms, and different property valuations all need to be coordinated.

A mortgage broker can compare options across multiple lenders, identify which properties should be refinanced together and which should be left alone, and structure the loans in a way that aligns with your income and tax position. This is particularly valuable if you are also looking to consolidate debt or access equity as part of the refinance.

Brokers also manage the documentation process, which reduces the chance of delays or errors that could hold up settlement. If you are managing work, children, and multiple properties, handing that workload to someone who understands the process can make the difference between completing the refinance and letting it slide.

Call one of our team or book an appointment at a time that works for you. We will review your current loans, identify where you can save or unlock equity, and structure a refinance that supports your goals without adding unnecessary complexity.

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