Transfer Home Loan? Here's How to Gain Control (2026)

In today’s dynamic housing market, you might find yourself needing to transfer your home loan to someone else. Whether due to a life change, financial shift, or strategic decision, understanding the ins and outs of transferring a home loan can save you time and money. But is it possible to transfer a home loan in Australia, and if so, what does the process involve?

Understanding Home Loan Transfers

In Australia, a home loan transfer—often referred to as a mortgage assumption—is not as straightforward as it might initially seem. Unlike simply selling your home, transferring a home loan involves allowing another party to take over your existing mortgage obligations. This can be an appealing option if interest rates have increased since you secured your mortgage, allowing the new borrower to benefit from your lower rate.

However, lenders generally do not allow a straightforward transfer. Instead, the new borrower typically needs to qualify for the existing loan under current lending criteria. This means they must meet the lender’s credit, income, and financial stability requirements. Additionally, legal ownership of the property must also be transferred, which can involve additional costs and legal processes.

Current Market Information and Requirements

As of 2026, interest rates in Australia have seen some fluctuations. Most home loan rates range between 6.49% and 12%, depending on the lender and the type of loan. With access to over 83 lenders, Esteb and Co can help you find competitive rates and terms that suit your needs.

When considering a home loan transfer, several key requirements and factors should be taken into account:

• Creditworthiness of the New Borrower: The person assuming the loan must have a good credit score, typically over 650, to qualify for most home loans.
• Financial Stability: Proof of stable income and employment is necessary, with lenders often requiring a debt-to-income ratio below 35%.
• Equity in the Property: Lenders prefer that the new borrower has some equity in the property, usually at least 20%, to minimise their risk.
• Documentation and Fees: Legal documents and transfer fees can add up, so it’s crucial to factor these into your decision.

Steps to Transfer a Home Loan

Transferring a home loan is a multi-step process that requires careful planning and execution. Here’s a step-by-step guide:

1. Consult with Your Lender: Contact your lender to discuss the possibility of a loan transfer and understand their specific requirements and restrictions.
2. Prepare Financial Documentation: Gather necessary financial documents for both yourself and the potential new borrower, including income statements, credit reports, and identification.
3. Submit an Application: The new borrower must submit an application to the lender, similar to applying for a new loan.
4. Legal Transfer of Ownership: Engage a solicitor to handle the legal transfer of property ownership, ensuring all legal requirements are met.
5. Finalise the Transfer: Once the lender approves the new borrower, finalise the transfer by completing all necessary paperwork and paying any applicable fees.

Tips and Considerations

Transferring a home loan can be complex, so it's essential to approach it with a strategic mindset. Here are some expert tips to consider:

• Evaluate Market Conditions: Assess current interest rates and market conditions with the help of a mortgage broker from Esteb and Co to ensure the transfer is financially viable.
• Seek Professional Advice: Consult with a financial advisor or mortgage broker to explore all available options and potential implications.
• Negotiate Terms: Don’t hesitate to negotiate terms with your lender to see if they can offer better conditions for the transfer.
• Consider Refinancing: If transferring the loan is too complicated, refinancing might be a simpler option, allowing the new borrower to secure a new loan under their name.

Frequently Asked Questions

• Can I simply transfer my home loan to a family member?
  No, the new borrower must qualify for the loan under the lender’s criteria, and legal ownership must be transferred.
• Are there costs associated with transferring a home loan?
  Yes, there are typically legal fees, administrative costs, and potential penalties for breaking the loan term.
• What if the new borrower has a low credit score?
  A low credit score may hinder the transfer process. Improving the score or having a co-borrower might be necessary.
• Will the interest rate change with the transfer?
  Not necessarily. If the loan is assumed, the interest rate remains the same, but refinancing could lead to different rates.
• How long does the transfer process take?
  The process can take several weeks to months, depending on lender requirements and the complexity of the transfer.
• Can the loan transfer be denied?
  Yes, if the new borrower does not meet the lender’s criteria, the transfer may be denied.
• What role does Esteb and Co play in this process?
  With access to over 83 lenders, Esteb and Co can provide expert guidance on navigating the transfer process and exploring alternative options.