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Michelle  S.
Michelle S.
Sydney, NSW

We have recently taken out a mortgage but have had to go with a loan that has a higher than average interest rate because of a small issue on my husbands credit file. Assuming we make payments early, how long until we can refinance at a lower rate?

8 years ago


Hi Michelle,

From what you've described you have gone to a non-conforming lender such as Pepper or Liberty. I'm curious as to how small the credit blemish was as well as what it was for?

Recently I was General Manager for a leading Australian Credit Repair law firm, specialising in removing credit issues that were not lawfully placed on your credit file.

You may be able to refinance after 6 months provided the blemish is no longer in the credit file.

Call me if you would like further details about how to resolve your situation and get back to a lower rate home loan.

John J Maxwell
Senior Mortgage Consultant
Cocalex Holistic Mortgage & Finance Consulting
0434 544 225

Hi Michelle, to get back to Prime Lending with more favourable interest rates you will need to wait until the credit file is clear for all borrowers. Credit impairment stays on a credit file for 5 years from the date it is registered on the file whether paid or not. You also need to have built up some equity to avoid LMI usually above 80%. We do 85% on Prime lending refinance with clear credit & excellent repayment conduct on all debt to be refinanced, regards, John

Michelle. Hi thanks for your question. On the good side you were successful in getting your finance 'over the line'
Your ability to refinance however at what is known as 'prime' rates will not be assessed on your additional payments.
Rather, it will be based on who you incurred the credit issue with, how long ago was it, and what was the value. For the purpose of this reply, I am going to assume that the issue is now fully paid.
I would be happy to provide additional advice but would need to read the credit file to do so.
Please give me a call if you would like to chat further
Ken Olds
1300 ASK KEN

Hi Michelle

Your question is very interesting and many people in similar circumstances also do not fully understand what their next move should be or when it should be done.

To get you a more accurate answer I would need understand what is on the credit file and when it will "fall off" the file. Yes past mistakes is not a true reflection of what you are 7 years later.

That said the usual way is to approach the current lender and ask them for a better product/rate once you have a history of repayments behind you. Most will be willing to "re-price" your loan and give a more acceptable rate. So aim for 12 months of making your repayment obligations on time every time before you negotiate.

Another more mainstream lender will only entertain your situation if the credit file has changed. As a result they won't take into account your good conduct with the higher rate lender anyway.

Hope that helps. Happy to discuss further to clarify any questions you may have.


Hi Michelle, thank you for your post.
In Order to refinance your current loan to another lender for lower rate of interest, it will depend on factors such as (again) your husbands credit file and your repayments conduct on your current Home loan. If for example, in 6-12 months down the track, your husbands credit file has "cleared " which means the "small issue" no longer appears on his credit report and your repayments history on the home loan has been up to date with no missed payments or late payments, then we can look into a refinance within 6 months time. I hope this helps! If you need to discuss further Michelle, please contact me and I will be more than happy to assist further.

Melissa Huynh
Finance Broker
0428 204 143

Hi Michelle, firstly depends on the issues listed and dollar value of those issues.. with that information you can get a more exacting answer. regards Ariel

Hi Michelle,
It seems you and your husband have fallen into the same trap as many thousands of others.

There are many comments from some very experienced people who have set out to poi t you in the right direction.

My law firm, MyCRA Lawyers works exclusively in removing defaults and judgments from our clients credit files.
I am happy to have a no obligation, no charge look at your (husbands) credit report and let you know exactly where you stand right now, what you can do next and what your other options might be too.
If nothing else, at least you'll know where you stand. It would be good to know what's what wouldn't it...

Call my offices on 1300667218 anytime. I am also a Finance Brokers Association of Australia State Councilor for Qld and NT so I'll be at the FBAA national conference all day tomorrow, but I'm happy to look at it on Monday for you.

I hope this makes you feel a little more comfortable and I look forward to chatting with you both soon.

With warm regard,
MyCRA Lawyers

Graham Doessel
Chief Executive Officer

Once the default is clear you can refinance - lenders like pepper or liberty expect you to refinance once you can.

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