Everything you need to know about refinancing multiple properties

Refinancing multiple properties means considering how each loan interacts with the others.

When you hold more than one property, refinancing isn't just about comparing individual rates. Your entire portfolio becomes part of the calculation, and lenders assess your position differently. Cross-collateralisation, debt serviceability, and the order in which you refinance all shift the outcome. Missing any of these factors means you might refinance one property successfully while making the next one harder to refinance or limiting your ability to purchase again.

Why refinancing multiple properties differs from refinancing one

Lenders assess your total debt position when you apply to refinance any property in your portfolio. Even if you're only refinancing one loan, the lender reviews your income against all property expenses, including the loans you're not refinancing. Your ability to service debt across the portfolio affects what rates and loan structures you can access.

Consider an investor holding three properties. They refinance the first property to a lower rate, but the application increases their reported rental income because the new lender uses a different calculation method. When they refinance the second property six months later, their serviceability has changed, and the third property becomes harder to refinance or limits their ability to borrow for future purchases. Refinancing in sequence without mapping the full portfolio means decisions made on property one affect what's available for property two and three.

Should you refinance all properties at once or stagger them

Refinancing all properties simultaneously gives you a complete view of your portfolio and avoids serviceability gaps, but it also concentrates risk if your financial position changes during the process. Staggering refinances lets you test one lender's approach before committing the rest of your portfolio, but it can complicate serviceability calculations and limit your options if lenders reassess your position between applications.

The decision depends on whether your properties are cross-collateralised, how much equity you need to access, and whether you plan to purchase again soon. If your loans are with the same lender and cross-collateralised, refinancing one property without refinancing the others may require the lender to release security, which they may refuse if it weakens their position. If your loans are held separately, staggering refinances gives you flexibility to move one property at a time without affecting the others.

In our experience, investors who plan to purchase another property within twelve months often stagger refinances so they can access equity from one property first, then refinance the others once the new purchase settles. Refinancing all properties at once before a purchase can reduce your borrowing capacity if lenders reassess your position mid-application.

Cross-collateralisation and how it affects your refinancing options

Cross-collateralisation occurs when one lender uses multiple properties as security for all loans in your portfolio. The lender holds a mortgage over all properties, even if each loan is separate. This structure gives the lender more security, but it limits your ability to refinance individual properties without their approval.

If you want to refinance one property out of a cross-collateralised portfolio, the lender must agree to release that property from the broader security pool. They may refuse if releasing the property reduces their overall security position below a level they're comfortable with. Releasing security often requires a valuation and formal consent process, which adds time and cost.

The alternative is to refinance all cross-collateralised properties together, either to the same new lender or by splitting them across multiple lenders. Splitting properties across lenders gives you flexibility to refinance or sell individual properties later without needing consent from other lenders, but it may reduce your borrowing capacity because each lender assesses your position independently.

Serviceability across multiple loans and how lenders calculate it

Lenders calculate serviceability by comparing your income to all expenses, including every loan in your portfolio. Rental income is factored in, but lenders typically apply a discount of 20% to account for vacancy and maintenance costs. Interest rates are assessed at a buffer rate, usually 3% above the actual rate, to ensure you can still service the debt if rates rise.

When you refinance one property, the new lender assesses your ability to service that loan plus all existing loans. If your rental income is marginal or your existing loans are at higher rates, your serviceability may look worse to the new lender than it does to your current lender. This is common when coming off a fixed rate and refinancing to a variable rate at the same time, because lenders assess the new rate at the buffer level, not the actual rate.

An investor with two properties and a primary home might find that refinancing the investment properties first improves their serviceability because rental income is reassessed at current market rents, which may have increased since the original loan was written. Refinancing the primary home first, however, increases debt without adding rental income, which can reduce serviceability for the remaining refinances.

Accessing equity from one property to fund the next

Refinancing to access equity requires the lender to revalue the property and approve a higher loan amount. When you hold multiple properties, the order in which you access equity affects how much you can borrow and whether you can refinance the remaining properties later.

Consider a scenario where an investor owns two properties, each with substantial equity. They refinance the first property to access equity for a deposit on a third property. The refinance increases the loan amount, which increases their debt and reduces their serviceability. When they apply to purchase the third property, their borrowing capacity is lower because the refinanced loan is now larger. If they had accessed equity from both properties simultaneously, they could have borrowed more overall because the lender would have assessed the full position at once.

Accessing equity from one property at a time works if you need funds urgently or if your serviceability is tight and you want to stage the borrowing. Accessing equity from multiple properties at once works if you want to maximise borrowing capacity and avoid multiple application processes.

How Adelaide's property market affects refinancing decisions for investors

Adelaide's median property values have increased steadily over recent years, which means many investors who purchased several years ago now hold more equity than they realise. Properties in suburbs like Glenelg, Brighton, and Prospect have seen consistent growth, and refinancing lets you access that equity without selling.

The local market also affects how lenders assess rental income. Adelaide's rental vacancy rate has remained low, and rents have increased across most suburbs. Lenders reviewing your refinance application will reassess rental income based on current market rates, which may improve your serviceability compared to when you first purchased. If your properties are in high-demand rental areas, the reassessment can increase your borrowing capacity and open up options you didn't have previously.

Investors holding multiple properties in Adelaide's inner suburbs often find that refinancing all properties together gives them more flexibility to purchase again or consolidate debt, particularly if they refinance before property values plateau.

Structuring loans to maintain flexibility across your portfolio

How you structure loans when refinancing affects how much flexibility you have later. Keeping loans separate rather than cross-collateralised lets you sell or refinance individual properties without affecting the others. Using offset accounts rather than redraw facilities gives you more control over surplus funds, and splitting loans between fixed and variable rates across your portfolio lets you manage interest rate risk without locking your entire portfolio into one structure.

An investor with three properties might hold one loan on a fixed rate to provide certainty, one on a variable rate with an offset account to manage cashflow, and one on a variable rate with the ability to make extra repayments. The structure gives them options depending on what happens with rates, rental income, or their personal financial position. If they had locked all three properties into fixed rates simultaneously, they would have less flexibility to access funds or refinance early without paying break costs.

Structuring loans across multiple lenders also reduces concentration risk. If one lender tightens serviceability or stops offering investment loans, you still have loans with other lenders and can refinance the affected property without moving your entire portfolio.

When refinancing multiple properties doesn't make sense

Refinancing isn't always the right move, even if lower rates are available. If you're planning to sell one or more properties in the next twelve months, refinancing may not be worth the application cost and time. Most lenders charge discharge fees, and if you refinance then sell shortly after, you've paid for a loan you barely used.

Refinancing also may not make sense if your current lender offers a retention rate that's close to what you'd get by refinancing. Retention rates are discounted rates offered to existing customers who indicate they're considering refinancing. If the difference between the retention rate and a new lender's rate is small, staying with your current lender avoids the application process and keeps your loan structure intact.

If your loans are heavily cross-collateralised and your current lender refuses to release security, refinancing one property may require refinancing all of them, which increases cost and complexity. In that situation, a loan health check can clarify whether refinancing is worth the effort or whether other strategies, like negotiating with your current lender, deliver a comparable outcome with less disruption.

Call one of our team or book an appointment at a time that works for you to review your portfolio and map out a refinancing approach that fits your goals.

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