MFAA Calls for 10-Day Mortgage Discharges to Boost Productivity — What Borrowers Need to Know

MFAA Calls for 10-Day Mortgage Discharges to Boost Productivity

Australia's peak mortgage broking body, the Mortgage & Finance Association of Australia (MFAA), has proposed that banks and lenders process mortgage discharge requests within 10 business days — arguing that fixing this single bottleneck could meaningfully improve national productivity.

What the MFAA Is Proposing

The MFAA raised mortgage discharge delays as a key productivity issue at the Senate Select Committee on Productivity in Australia. Currently, discharge turnaround times can stretch to weeks or even months with some lenders, trapping borrowers who want to refinance, sell, or switch to better-value loans.

The MFAA argues that a 10-business-day discharge standard across all lenders would:

• Allow borrowers to move faster when rates or circumstances change
• Reduce friction for brokers processing refinance applications
• Create a more competitive lending market where customers can exit easily

Why This Matters for Borrowers

Slow discharge processes disproportionately affect borrowers who are actively trying to improve their financial position — particularly those looking to refinance from a bank that has rejected their updated circumstances. If you're self-employed, have recently changed income structure, or need to access equity quickly, discharge delays can cost thousands in higher interest charges.

Non-bank lenders like MPFG Capital already operate with faster turnaround cultures by design. Without the bureaucratic layers of major bank internal systems, non-bank lenders can often process transactions more efficiently from application through to settlement and discharge.

What This Means at the Industry Level

The MFAA's push reflects growing frustration within the broking community about structural inefficiencies that benefit lenders at the expense of borrowers. By locking borrowers in with lengthy discharge timelines, banks effectively reduce competitive pressure on their existing loan books.

From a regulatory perspective, the MFAA's submission to the Senate productivity inquiry signals this is now a policy-level issue — not just an industry complaint. This could eventually lead to mandatory discharge timeframes regulated by ASIC or Treasury.

MPFG Capital's View

At MPFG Capital, we believe borrowers should have the freedom to make lending decisions that suit their current circumstances — not be trapped by administrative barriers. Whether you're looking to refinance from a bank that no longer serves your needs, or access equity from an existing property, understanding discharge timelines is an important part of planning your next step.

If you're currently with a major bank and considering your options, speaking with a lending specialist who understands both the broker process and non-bank alternatives is a practical starting point.

This article is general information only. It does not constitute financial advice. MPFG Capital holds ACL 553698. Always seek professional advice tailored to your circumstances.