What Is Cash Out Refinancing and How Does It Work?

Your guide to cash out refinancing and how it works.

Considering refinancing to access cash but not sure how it works?  

What is a cash out refinancing?

A cash out refinance allows you to access the equity you’ve built up in your home in the form of cash. These funds can be released into:  

  • A bank account,  
  • An offset account, or  
  • A line of credit.

Please note we currently do not offer offset accounts at Unloan, but a linked-CommBank offset account is coming soon.

How does a cash out refinance work?

The process of a cash out refinance is similar to refinancing your regular home loan.  


1. Calculate your equity

The first step in refinancing to access your equity is to calculate how much equity you have in your property. The simplest way to calculate your equity is to work out the difference between the property’s current value and the total amount outstanding on your mortgage.

2. Consider your reason for refinancing

It’s a good idea to work out what your plans are for the cash you’re hoping to access in case the lender asks what your intentions are.

3. Research and compare home loans

One of the most important steps in the refinancing process is researching and comparing the different home loans. You might want to use a mortgage calculator to work out your potential savings and repayments so you can compare how the different loans stack up against each other.

4. Apply for your new home loan

Now that you’ve settled on your home loan of choice, it’s time to submit an application.  

5. Discharge your original mortgage

Once your new home loan is approved and you’ve signed the new contract, your new lender will get the ball rolling on discharging your old home loan. You might be required to fill out a mortgage discharge form as part of the process.

6. Prepare for settlement

After all the details have been finalised, your new lender will let you know when the settlement date is, the final payout figure and when you can expect the cash to hit your account depending on how the funds will be released.

Learn more about switching to Unloan here.

The article does not have regard for the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this, consider the appropriateness to your circumstances.

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