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ARTICLE · 15 JULY 2026

Refinancing Or Selling A Home Which Retains More Equity?

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Borrowers facing mortgage default must choose between refinancing their existing loan or selling their property voluntarily before enforcement action is completed. Understanding the practical differences between these options, including how each affects equity retention and borrower control, can significantly impact the financial outcome when default proceedings are underway.

AustraliaReal Estate and Construction
Wayne Davis
Wayne Davis
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Article Summary

Borrowers facing mortgage default generally have two practical options before a lender completes enforcement: refinance the existing loan or sell the property voluntarily before a mortgagee sale occurs. In many cases, acting early preserves substantially more equity than waiting until possession proceedings or a mortgagee sale are underway.

Mortgage default does not automatically prevent refinancing. Depending on the borrower’s equity, financial circumstances and the stage of enforcement, refinancing may remain available even after a default notice has been issued or court proceedings have commenced. Likewise, many borrowers can still sell their property voluntarily during the enforcement process, provided appropriate arrangements are made with the lender.

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