Refinance a private loan

When a private loan reaches its term

Short-term private loans are written around an exit - a property sale, a bank refinance, a deal completing. When that exit slips, the loan still matures on its date. Past the term, most facilities step up to a default interest rate, and the enforcement timeline on a caveat or registered second can be short. Refinancing resolves it cleanly: the maturing loan is paid out in full, on time, and a fresh facility resets the runway while your real exit catches up.

How a refinance works

We pay out your current facility and secure a new one against the same property - usually a caveat or a registered second mortgage, depending on the position behind your first mortgage and how long you need. If your circumstances have improved since the original loan, with a firmer exit, more equity or a signed contract, the new facility is priced to where you stand now rather than where you were. Where the loan sits behind a first mortgage, we confirm the priority position before anything is committed, so there’s no surprise at settlement.

What it’s typically used for

• A caveat or bridging loan maturing before a sale settles
• A second mortgage at term while a bank refinance is still in assessment
• A facility already accruing default interest that needs paying out fast
• Rolling two short-term loans into one cleaner facility
• Moving from a caveat to a registered second for a longer, lower-cost runway

Refinancing while on maternity or parental leave

Straight answer first: you can refinance a home loan while on maternity or parental leave, but the lender has to be satisfied that you are going back to work and that the loan can be serviced on reduced income in the meantime. Being on leave does not disqualify you on its own. What lenders look for is a return to work letter from your employer confirming the date, hours and salary you are coming back to, evidence of savings or paid parental leave that covers repayments until then, and your partner’s income if the loan is joint. Some lenders assess return to work income as if you were already back, others only count what is being paid today, and a few will decline an applicant on leave outright.

That leaves three realistic choices for the home loan:

1. Wait until you are back at work with one or two payslips, then refinance with the widest choice of lenders.
2. Go now with a lender or broker who assesses return to work income, accepting a smaller panel and more paperwork.
3. Hold the existing loan and ask your current lender to reprice you instead, which needs no new servicing assessment.

Whichever you choose, answer truthfully about foreseeable changes to income. You do not have to volunteer a pregnancy, but if the application asks about expected changes to employment or income, planned leave is one of them.

When the loan maturing is a private, bridging or construction loan

This is the group that lands on a page like this one. The private loan was written around a bank take-out, the term has arrived while you are on leave, and the bank will not count your income until you are back. Two rules decide what can be done:

• If the security is your own home and the loan is for personal purposes, it is regulated consumer credit. A private lender cannot simply extend or refinance it. Your options are the three above, or a short hardship arrangement with the current lender.
• If the loan is against an investment property, or is business purpose and held through a company or trust, a private lender can refinance or extend it for 6 to 12 months until return to work income counts and the bank take-out can happen. A short, priced extension is usually cheaper than sitting in default interest while you wait, and it stops the enforcement clock from starting. See bridging finance and what happens when a construction loan expires.

For the home loan, a mortgage broker is the right route. For an investment or business-purpose loan that needs bridging until you are back at work, give us the payout figure, the property and your return to work date through the enquiry form and we’ll match you with a funder who can confirm the position.

What we’ll need

The payout figure and term of your current loan, the property and its security position, and a realistic exit - the sale, refinance or cash event that clears the new facility. Borrowing is business-purpose, by a company or trust. With those in hand an indicative position is usually quick, and settlement often follows in days. Indicative terms are representative and subject to assessment.