Home Loan Variations and Restructures: Broker Checks

A loan variation changes an existing loan after settlement, with the lender’s agreement. Start by identifying exactly what your client wants to change, then select the lender process that can deliver it. A loan restructure can change several parts of the facility, so separate each request before assessing the whole proposal.

An interest-only switch, a top-up and adding a borrower can need different evidence and approvals. Keeping the same lender doesn’t mean the original approval covers the new request.

Classify the Requested Change

Record the requested change and the result your client expects before choosing a form or recommending a new loan. Include the affected accounts, current balance, remaining term and any deadline. Ask why the client wants the change, especially when they want lower repayments.

Use the following distinctions to decide the next route. These are working descriptions for the broker’s file, not promises about a lender’s approval process.

Request type	What changes	Broker’s first action
Administrative request	Contact details or a supported repayment collection instruction	Use the lender’s account-servicing process and check account authority.
Contractual variation	A term, repayment type, limit or product condition of the existing loan	Obtain the exact variation requirements and proposed terms.
Internal restructure	The arrangement of facilities, such as splitting a balance between loan accounts	Establish whether the lender varies existing contracts or requires a new facility.
Refinance	A new loan replaces the existing loan	Compare the new contract with the existing-lender variation.
Hardship request	The client needs assistance because they cannot meet repayments	Contact the lender’s hardship team before recommending further borrowing.
Discharge	The lender releases a registered mortgage over property	Identify whether the debt is repaid, refinanced or retained under a security substitution.

For a term extension, record both the requested maturity date and why the client needs it. If the lender approves an extension, compare the lower payment with interest over the longer repayment period. If the client cannot meet current commitments, the request also needs a hardship assessment.

For a repayment-type change, identify whether the client wants principal and interest or a defined interest-only period. A temporary interest-only request needs a reason, an end date and a plan for the repayments after it ends.

A borrower change alters who owes the debt. A transfer of equity changes ownership shares in the property. Record both separately when someone is being added to or removed from the mortgage, because changing title alone doesn’t release a borrower from their loan obligations.

For a split change, record the amount and rate type proposed for each account. For a security change, identify the property being released and the replacement property or other proposed security. Security is the asset the lender can use to recover unpaid debt.

Obtain the Current Lender Terms

Obtain the terms for the exact requested change, including eligibility, evidence, assessment and signatures. Keep the dated lender response or document in the file. A general product brochure doesn’t establish how the client’s existing contract can be changed.

Build a before-and-after record covering the following items.

• Loan balance and limit, purpose and remaining term.
• Interest rate, repayment type and the first repayment under the changed arrangement.
• Fees for the change, ongoing charges and any fixed-rate break cost.
• Offset links, redraw availability and where existing funds will sit after processing.
• Borrowers, guarantors and every property securing the facilities.
• Evidence needed, signing parties and the proposed effective date.

A NAB Home Loan Top-Up

NAB’s top-up guidance, marked correct at 18 July 2025, describes increasing an existing loan using available equity. It says most variable products are eligible if the borrower can meet increased repayments. Its stated borrowing limit is up to 80% of the property’s value, subject to assessment.

NAB requests income documents such as payslips, up-to-date repayments and an eligible loan type. It may require a property valuation. Its page says a top-up doesn’t change the loan term and generally doesn’t attract fees, although the lender confirms charges for the request.

For the submission, record the extra amount and its purpose beside the current balance. Reconcile the income evidence with the client’s expenses and other debts. Retain the lender’s valuation, decision, proposed repayment and accepted variation documents.

In a hypothetical example, a home valued by the lender at $800,000 has a $500,000 loan. An extra $50,000 produces a $550,000 balance, or a 68.75% loan-to-value ratio (LVR).

This calculation shows the debt relative to the property value. Affordability and product eligibility still decide whether the top-up can proceed.

Switching to Interest Only or Changing Splits

Yes, a client can request a switch to interest-only repayments where their lender and product permit it. Approval depends on the proposed period, the client’s circumstances and the lender’s requirements. The principal stays unpaid during that period, so assess the later repayments as well as the initial payment.

CommBank’s switching terms, dated 1 October 2026, require a reason for an interest-only request. They include estimated payments during and after the interest-only period, plus declarations about affordability. CommBank obtains guarantor consent when the borrower switches to interest only or extends that period.

Those terms restrict eligible split combinations. They also describe possible offset changes and an Early Repayment Adjustment when a fixed loan is switched before its fixed period ends. Assess the actual product combination before promising the client that their existing features will continue.

As at October 2026, CommBank’s loan-change page directs customers to contact the bank for changes unavailable in NetBank, including interest-only changes. Its documented online route for switching to principal and interest is a different process.

Adding a Borrower or Changing Security

Adding someone to a mortgage without refinancing depends on whether the lender permits a borrower variation for that facility. Establish the loan approval route before the client arranges a title transfer. If the lender requires a replacement loan, use its refinance or new-application process.

A security substitution doesn’t automatically permit a borrower change. CommBank’s substitution guide, dated 1 February 2026, prohibits adding or removing borrowers or adding a guarantor while keeping the existing loan through that route. It says additional borrowing or changed ownership can require a new application.

The guide also allows for a credit assessment and requests for financial information despite no full application being required in the ordinary substitution route. For a combined borrower and security change, separate the ownership documents from the lending decision. A solicitor or conveyancer handles the title transfer and applicable duty treatment.

Compare Variation and Refinance

Compare the existing-lender variation with a replacement loan using the same borrowing amount, purpose and repayment horizon. You can refinance with your existing mortgage company if it has a suitable new facility. Westpac’s refinancing guide, dated 14 May 2026, describes refinancing with either the current lender or another lender.

The lender’s proposed contract establishes whether an internal change is a variation or a refinance. Compare both routes on the following basis.

Factor	Existing-lender variation	Refinance
Total cost	Change fees, revised rate, ongoing charges and any break cost	New-loan charges, payout or discharge costs and any break cost
Timing	Evidence, assessment and signing needed for the selected change	Application, approval, documents and settlement dependencies
Assessment	Specific variation requirements, including any reassessment	Requirements for the replacement loan
Features	Features retained, altered or lost on the existing facility	Features and limits under the new product
Security	Any changed property or guarantee requirements	Properties and guarantees required for the replacement facility

For a hypothetical comparison, one route has $300 in change costs and the other has $1,800 in switching costs. If the second saves $100 a month, its extra $1,500 takes 15 months to recover. That calculation assumes equal balances and repayment terms, with savings unchanged and no other costs.

A lower monthly payment from extending the term isn’t the same as a lower total cost. Compare projected interest over the remaining term and the proposed term separately. Preserve the client’s expected repayment discipline when comparing an offset or redraw feature.

If reduced income or rising expenses prevent the client meeting repayments, start with mortgage hardship assistance. Moneysmart’s interest-only guidance warns that repayments rise when interest only ends. A lower temporary payment cannot establish that the later payments are affordable.

When the selected route replaces the loan, use the refinance requirements guide for the full application. A property release within an approved substitution still needs the lender’s release instructions, even when the loan remains open.

Assess and Authorise the Change

Complete the selected route’s enquiries, verification and affordability work using the client’s current circumstances. Treat the original approval as historical evidence. It doesn’t establish today’s income, expenses or ability to repay a changed facility.

The Australian Securities and Investments Commission (ASIC) describes responsible lending obligations as enquiries, verification and assessment of whether credit is unsuitable. Apply the obligations relevant to the credit assistance you provide. A simple servicing instruction and assistance to obtain additional credit need different treatment.

Use this sequence to complete the file and verify the change.

1. Record the client’s requirements. Document the exact change, reason, preferred timing and any expected change to income or expenses.
2. Collect current evidence. Reconcile the documents required for the route with income, living expenses, liabilities and repayment history. Resolve inconsistent figures before submission.
3. Assess the changed payments. For interest only, test affordability both during the proposed period and afterwards. For a top-up or term extension, assess the changed balance and repayment period.
4. Explain the comparison. Record why the selected route meets the client’s requirements, its cost and any feature or security consequences. Retain the advice or credit-assistance records required for your role.
5. Obtain authority and acceptance. Keep client authority to communicate and submit, then obtain acceptance through the lender’s signing process. Check every required borrower and guarantor has completed their part.
6. Verify the completed facility. Compare the lender’s completion notice and account records with the accepted terms. Check the balance, rate, repayment type, maturity, payment date, offset links and securities affected by the change.

For policy questions, Bulma’s Policy Advisor quotes the lender wording behind its answers. A broker can retain that wording in file notes alongside the lender’s terms for the client’s actual request.

NAB’s joint-loan approval guide, as at October 2026, gives the second account holder 48 hours to approve an app request. They need their own login. If that request expires, arrange a fresh request through the lender’s process before treating it as accepted.

If processing is delayed, identify whether evidence, assessment or a signature is outstanding and follow up that item. If an offset link or repayment differs after completion, send the lender the accepted terms and completion record for correction. Close the task only when the account records match the agreed change.