What happens to my bank guarantees when I refinance?
They do not move across with the loan, so the new lender has to issue replacements before your old bank will release anything. That sounds simple until you remember a third party holds the paperwork. Your landlord has the original guarantee sitting in a drawer and the old bank will not cancel its exposure until that document is physically returned. Nobody chases it until settlement is nearly due, which is how a straightforward refinance ends up running weeks late.
Why guarantees hold up settlement
A guarantee is a promise by the bank to pay someone else on demand. While it is on foot, the bank counts it as exposure and holds security against it, which means it will not discharge a mortgage or release a term deposit with a live guarantee still outstanding. So the sequence has to be right. The incoming lender issues a new guarantee, the beneficiary accepts it and hands back the original, then the outgoing bank cancels and releases. Miss a step and the refinance stalls on the day it was meant to settle.
How to keep it moving
List every guarantee you have on foot before the application goes in. Most businesses remember the lease bond and forget the ones sitting with a utility, a fuel supplier or a government authority. Send the wording of each to the new lender early, because a beneficiary who wants specific wording can send you back to the start. Then contact the beneficiaries yourself and ask what they need to swap the guarantee over, since landlords in particular can take a fortnight to act. A broker doing this regularly will usually start the exchange while credit approval is still being finalised.
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Last updated 15th July 2026. Reviewed by Authorised Credit Representative 554584 of Australian Credit Licence 414426.