What is a home loan settlement and how does it work?

family first home buying property

Home ownership is a major milestone in many people’s lives. The journey typically starts with saving for a deposit and ends with having the keys to your new place. In the process one of the many boxes you’ll need to tick off is completing your home loan settlement, or the mortgage settlement process.

What is a home loan settlement day?

On settlement day you take official ownership of a property. This comes after you successfully make an offer, pay the deposit and sign the contract of sale. The settlement process usually includes registering your home loan against the property that you’re buying, which is why it's called home loan (or mortgage) settlement. 

The official settlement date is typically pre negotiated and mentioned in writing. Your settlement date can take between 4-6 weeks from signing and exchanging a contract of sale to becoming the new property owner.

How to prepare for home loan settlement?

Before settlement day, it’s important to do your final inspection around the property and double check everything is in order. In theory, the property should be in the same condition as it was when you signed the contract of sale. 

When doing your final inspection, make sure to check that:

  • There’s been no significant damage to the property since signing the contract
  • All appliances, fittings and other functions are working properly
  • All furniture has been removed 
  • Any rubbish or building materials have been removed
  • The house is reasonably clean.

If you find an issue during this inspection, you’ll need to let your conveyancer or solicitor know. This could also delay settlement day.

Another important task is making sure that your funds are in order. You’ll need to consider both the fees you need to pay and monetary support. 

For example:

  • Stamp duty 
  • Any adjustments for fees already paid for by the seller
  • Potential First Home Owner Grants.

Remember, if you don’t have everything in order, you run the risk of your settlement being delayed. So make sure to also think about potential insurance, agent and government fees. The last thing you want is to get to settlement day and realise that you’re short on funds.

What happens on home loan settlement day?

As mentioned above, settlement day is when you take legal ownership of your new property. On this day your conveyancer or solicitor does all the legal and admin tasks for you–such as liaising with your bank and the vendor’s solicitor. 

They will even make sure that the final payment is made so you are the new title deed owner. With that done, you’ll finally get the keys to your new home.

If you still haven’t reached the settlement stage of your home buying journey and are looking to learn more about getting a home, check out Mozo’s home loan resources. Alternatively, you can start comparing home loans below.

Home loan comparisons on Mozo - last updated 6 July 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    2.60% p.a.variable for 24 months and then 3.00% p.a. variable
    2.96% p.a.

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    2.64% p.a. variable
    2.56% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

  • Mozo Expert Choice Badge
    Variable Rate Home Loan

    Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.59% p.a. variable
    2.49% p.a.

    $5000 refinance cashback. Owner-occupier refinancers only living in NSW/VIC/SA metro and inner regional areas. Receive up to an additional 0.15% off your rate as you pay off the loan. Receive bonus payments up to $2,500. T&Cs apply. Mozo Experts Choice Award winner for 2022^.

  • Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.84% p.a. variable
    2.84% p.a.

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. Apply online in as little as 15 minutes.

  • Variable Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    2.64% p.a. variable
    2.66% p.a.

    Purchase and Refinance. Yard’s low-rate variable special home loan is packed with all features – unlimited additional repayments, free redraw, optional 100% offset account. Enjoy a simple online application.


* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

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