Home Loans and Refinancing With a Part 9 Debt Agreement

Can I get a home loan with a Part 9 debt agreement?

If you are searching this question, chances are you have already had at least one no. Maybe your bank turned you down flat the moment the agreement showed up. Maybe a lender's online form asked "have you ever entered a debt agreement?" and you closed the tab. Here is what most people in that position never get told: a Part 9 narrows which lenders you can apply to. It does not switch off borrowing altogether.

The major banks run applications through automated credit scoring, and a formal insolvency marker on a credit file typically fails the score before a human ever reads the application. But the Australian lending market is much bigger than the big four. Specialist lenders assess files manually. They look at your equity, your income, the story behind the agreement, and your conduct since. Some have specific policies for completed debt agreements. A smaller group may even consider a current one, most often where the loan is being used to pay the agreement out.

One more thing before the detail, because it matters. A Part 9 is not a moral failing. It is a legal tool that thousands of Australians have used at a hard moment, often on professional advice, often as the responsible alternative to bankruptcy. Lenders in the specialist market see these files every week, and so do we. Nobody here needs the backstory apologised for. We just need the facts of your file so we can map what is possible.

The rest of this guide covers what a Part 9 actually is, how long it follows you, borrowing during and after the agreement, paying it out early through a refinance, and the pathway back to a mainstream rate.

What is a Part 9 debt agreement?

Debt agreements exist for people whose unsecured debts (credit cards, personal loans, some bills) have become unmanageable, but who want to avoid full bankruptcy. Instead of each creditor chasing you separately, the administrator puts a single proposal to all of them: a repayment plan based on what you can genuinely afford. If enough creditors accept, the agreement binds all of them, the interest generally stops accruing on the debts included, and you make one regular payment to the administrator until the agreement is complete.

A few facts worth being clear on:

• It is a formal insolvency option, not an informal arrangement. Entering a Part 9 is technically an act of bankruptcy under the Act, even though it is not bankruptcy itself. That is why it carries formal consequences for your credit file.
• It is administered, not DIY. A registered debt agreement administrator manages the proposal, the creditor vote, and the payments. They are also the person who can answer questions about your specific agreement, including payout figures.
• Eligibility is capped. There are thresholds on income, assets, and unsecured debt for entering one, which AFSA indexes over time. The details are on afsa.gov.au.
• It is recorded in two places. On your credit file with the credit reporting bodies, and on the National Personal Insolvency Index (NPII), the public register of personal insolvencies that AFSA maintains. More on both below, because the timeframes are different and the difference matters for lending.

People often ask how a Part 9 compares with bankruptcy, and whether they made the right call at the time. That is a bigger conversation than this page, and we have written it up properly in our guide comparing debt consolidation, debt agreements, and bankruptcy. The short version for lending purposes: most lenders treat a completed Part 9 more favourably than a discharged bankruptcy, and if bankruptcy is your history instead, our guide to refinancing after bankruptcy covers that pathway.

One boundary we should be upfront about. We are mortgage brokers, not insolvency practitioners. This guide is about borrowing with a Part 9 on your record, not about whether to enter, vary, or terminate one. For decisions about the agreement itself, talk to your administrator or a financial counsellor, and use AFSA and Moneysmart as your reference points.

How long does a Part 9 affect my credit file?

This is where a lot of confusion lives, because a Part 9 is recorded in two different systems with two different clocks.

Your credit file

The credit reporting bodies (Equifax, illion, and Experian) list the debt agreement on your credit file for five years from the day the agreement starts, or until the agreement ends, whichever is later. Read that carefully, because the "whichever is later" part is the detail that changes strategies. If your agreement runs for three years and you complete it on schedule, the listing remains until the five year mark. But if an agreement drags on for longer than five years, the listing stays until the agreement actually ends. And that is also why finishing an agreement early can matter: the clock outcome is driven by the start date and the end date, and ending the agreement is what allows the listing to eventually clear.

The NPII

The National Personal Insolvency Index is a separate register run by AFSA, and it is searchable by the public, which includes lenders. Your debt agreement is recorded there from the time it is made. For a completed debt agreement, the NPII record is not permanent, but it does remain visible for a period beyond the end of the agreement. The exact timeframes depend on how your agreement ended (completed, terminated, or declared void), so rather than quote numbers that may not fit your situation, we will say it plainly: check afsa.gov.au or ask your administrator for how long the NPII record applies in your circumstances.

What this means for lending

That last row is worth underlining. Some lender application forms ask whether you have ever been party to a debt agreement, and that question does not expire when the listing does. Answering it honestly is not just the right thing to do, it is the practical thing: a non-disclosure discovered later is a far bigger problem than a disclosed Part 9 with a good story and clean conduct behind it. In the specialist market, disclosed history is workable. Discovered history is not.

The good news inside all of this: none of these records stop the clock on your recovery. Under comprehensive credit reporting, lenders also see up to two years of month-by-month repayment history, so every clean month you put on the board after (or during) the agreement is building the file that eventually gets you back to a mainstream lender.

Can I refinance while still in a Part 9?

Let us be honest about the shape of this one. Borrowing while inside a current debt agreement is the hardest version of this scenario. Most lenders, including many specialists, want the agreement finished before they will lend. But "most" is not "all", and for homeowners specifically, there is a version of this that lenders can get comfortable with.

Here is why. If you own a home with equity, a refinance can be structured so that the payout of your debt agreement is a condition of the new loan, settled directly from the loan proceeds. From the lender's side, the risk picture changes completely: they are not lending to someone in an ongoing insolvency arrangement, they are lending into a transaction that ends the arrangement. You come out the other side with the agreement completed, one mortgage repayment, and the recovery clock running in your favour.

What typically decides whether this is possible:

• Equity. This is the big one. The new loan needs to cover your existing mortgage, the agreement payout figure, and costs, all within the maximum LVR the lender will accept for this kind of file. The more equity, the more options.
• Conduct inside the agreement. A record of on-time payments to your administrator, and on your mortgage, tells the lender the hard part is already behind you.
• Income stability. The lender needs confidence in the repayments on the new loan, assessed on your current income, not the income you had when things went wrong.
• Your administrator. The payout has to be confirmed and processed through your debt agreement administrator, so they are part of the transaction. It is also worth asking them, and checking AFSA's guidance, about any obligations you have when applying for new credit during the agreement, because disclosure obligations can apply.

If you do not own property, or the equity is not there yet, the honest answer is that waiting and finishing the agreement is usually the strategy, and we would rather tell you that in one phone call than let you collect declined applications finding it out. Every unnecessary credit enquiry makes the eventual application slightly harder, which is exactly what we are trying to avoid.

Can I pay out my Part 9 early with a refinance?

This is the strategy most Part 9 homeowners have never been shown, and for the right file it changes the whole timeline. Instead of paying the agreement down month by month until its scheduled end date, the refinance clears the remaining obligations in one transaction. The agreement is completed, and everything that depends on completion starts earlier.

Why finishing early can matter so much:

• Lender policy is anchored to completion. The lenders with the better pricing for post-agreement borrowers typically measure from the date the agreement was completed. Complete it two years early and that entire recovery timeline shifts forward with it.
• The agreement stops consuming your cash flow. The administrator payment ends, which changes your monthly position and your borrowing capacity for everything that comes next.
• The record improves. A completed agreement reads very differently to a current one, on your credit file, on the NPII, and in the eyes of every assessor who reads your file afterwards.

Here is how the process typically runs when we structure one:

1. Strategy call and credit file review. With your consent, we pull your credit file and go through the whole picture: the agreement, your mortgage, any other debts, your income, and your property value. Before anything else happens, we both know exactly what a lender will see.
2. Payout figure from your administrator. You request the figure required to complete the agreement early. Only your debt agreement administrator can provide this number, and the lender will need it confirmed in writing. How early completion works mechanically for your agreement is a question for the administrator and AFSA, not for us, and we stay in our lane on that.
3. Lender mapping and modelling. We match your file against the lenders who accept this structure, then model the whole position: new loan amount, the payout, costs, and your monthly repayments before and after, side by side, in writing.
4. One application, positioned properly. We submit to the chosen lender with the story told upfront: what led to the agreement, how it has been conducted, and why the file is stronger now. In the specialist market, how a file is presented genuinely changes outcomes.
5. Settlement completes the agreement. The payout is made through your administrator at settlement, the agreement is finalised, and from that day the plan is about the road back to a prime lender.

A word of care, because this page will be read by people under real pressure: paying out a Part 9 early is not automatically the right move. It swaps unsecured obligations that were frozen inside a formal arrangement for secured debt against your home, usually over a longer term, and that trade has to be worth it on the numbers and sustainable on your income. We model it honestly, and if the answer is "finish the agreement as scheduled and refinance after", we will tell you that instead. Strategy before paperwork is the whole point.

What do lenders look for after a Part 9 is completed?

Once your agreement is done, you move from the hardest category into a well-trodden one. Completed debt agreements are core business for specialist lenders, and several assess them against clear policy rather than gut feel. Here is what actually drives the decision.

Time since completion

Some specialist lenders may consider a file from the day the agreement is marked complete. Others want to see one or two years of distance. As a general rule, each year after completion moves you into a wider pool of lenders at sharper pricing, and once the listing clears your credit file entirely, near-prime and eventually prime options come back into the conversation.

Conduct since

This is the one people underestimate. Two years of clean repayment history under comprehensive credit reporting tells an assessor more about who you are now than a five year old agreement tells them about who you were then. Perfect mortgage or rent payments, no new defaults, no dishonours, and modest use of credit all build the case. Every clean month is an asset.

Equity

For a refinance, your equity position sets the boundaries of what is possible. Specialist lenders typically cap LVR more conservatively on files with an insolvency history, so the same borrower with 40 percent equity has meaningfully more options than with 15 percent. Equity also absorbs the costs of the transaction, which matters when you are consolidating.

Income stability

Lenders want to see that the income servicing the new loan is settled and sustainable: consistent employment or, for self-employed borrowers, trading history they can verify. If your Part 9 came out of a period of unemployment or business trouble that has since resolved, that recovery is a core part of how we position the file.

Wherever you sit on that table, the same rule applies: the file that gets approved is the file that goes to the right lender, once, with the story told properly. Which brings us to the pathway.

The pathway back to prime rates

The biggest mindset shift we give Part 9 clients is this: stop thinking of the specialist rate as a punishment and start thinking of it as a stage. The sequence looks like this for most homeowners we work with:

1. Stabilise. The refinance consolidates the position, completes or clears what needs clearing, and gets you to one manageable repayment. This is the stage where breathing room comes back.
2. Rebuild. Every on-time repayment on the new loan goes onto your comprehensive credit report. No new credit problems, no unnecessary applications, no enquiries you do not need. The file quietly repairs itself month by month.
3. Review and move. We review your file regularly against lender policy. The moment a near-prime or prime refinance stacks up (rate saved versus costs to move), we run the numbers with you and make the move. When the move happens depends on your completion date, your equity, and your conduct, so we will not pretend there is one universal timeline. What we can say is that files that are managed to a plan get there faster than files that drift.

The clients who do best at this treat the recovery window as a project with an owner, and let us be the owner. You focus on the repayments. We watch the file, the market, and the calendar.

What will it cost?

For the full breakdown of every cost category in a consolidation refinance, including the lender risk fees unique to credit-impaired loans, see our guide to what debt consolidation costs.

We would rather you hear the costs from us now than discover them mid-process. Three things to know:

Specialist rates are higher than prime rates. Lenders price for risk, and a file with a current or recent debt agreement carries more of it on paper. How much higher depends on where your file lands: sharper pricing for a completed agreement with time and conduct behind it, deeper specialist pricing for a current one. Keep the comparison honest, though. The prime rate is not what you are giving up, because with a Part 9 on your file, the prime rate is not currently on the table. The real comparison is your total monthly position now versus your total monthly position after, and whether the structure gets you back to prime sooner than doing nothing would.

Broker fees apply. Loop charges broker fees for this work, and you will know exactly what they are before you commit to anything. Part 9 files take real work: the credit analysis, the administrator coordination, the lender mapping, the positioning, and the ongoing reviews that get you back to a mainstream lender. The full cost picture goes to you in writing before any application is lodged.

Model the whole move, not the headline rate. A refinance that pays out an agreement changes several numbers at once: the agreement payment ends, other debts may be consolidated, the loan balance and term change, and fees apply. Moneysmart's guidance on debt consolidation and refinancing makes the point we make in every strategy call: weigh the total cost over time, including fees and the effect of the loan term, not just the repayment next month. We put both versions of your life side by side in black and white before you decide anything.

And one cost that belongs in the ledger: the cost of waiting without a plan. If the numbers say wait, waiting is the strategy, and we will say so. But waiting without knowing what you are waiting for, while high-interest debts sit outside the agreement or the recovery clock runs unmanaged, has a price too. Knowing exactly where you stand costs you one phone call.

Frequently asked questions

Can I get a home loan while I am still in a Part 9 debt agreement?

In some cases, yes. A small number of specialist lenders may consider borrowers with a current Part 9, particularly homeowners with equity where the loan is used to pay out the agreement at settlement. Options are narrower and pricing is higher than after completion, but a current Part 9 is not an automatic no.

How long after completing a Part 9 can I get a home loan?

Some specialist lenders may consider you from the day the agreement is marked complete, and options generally widen the more time passes. The listing stays on your credit file for five years from the day the agreement started, or until it ended, whichever is later, and lenders weigh time since completion alongside your conduct, equity, and income.

Is a Part 9 debt agreement the same as bankruptcy?

No. A Part 9 debt agreement is a formal alternative to bankruptcy under the Bankruptcy Act, with different consequences. Entering one is technically an act of bankruptcy, and lenders treat it as a serious credit event, but most treat a completed Part 9 more favourably than a discharged bankruptcy.

Can I pay out my Part 9 debt agreement early?

In most cases, yes. Your debt agreement administrator can provide a payout figure for the remaining obligations, and if you own property with enough equity, some specialist lenders may allow that figure to be paid out through a refinance at settlement. Ending the agreement early can also mean the listing leaves your credit file sooner. Confirm the process with your administrator before committing to anything.

Will lenders see my Part 9 after it drops off my credit file?

Possibly. The National Personal Insolvency Index (NPII) records debt agreements separately from your credit file, and that record can remain searchable after the credit file listing has gone. Some lenders check the NPII and some application forms ask directly whether you have ever entered a debt agreement, so always answer honestly. Check afsa.gov.au for how long the record applies in your circumstances.

Does my partner's Part 9 affect my home loan application?

If you apply on your own using only your own income, your partner's Part 9 generally does not appear on your credit file. If you apply jointly, the lender assesses both credit files, so the Part 9 becomes part of the application. Which structure works better depends on your incomes and the loan size, and it is exactly the kind of question we work through in a strategy call.

Related guides

If a Part 9 is only part of your picture, these guides go deeper on the rest:

• Debt consolidation vs bankruptcy: how debt agreements, bankruptcy, and consolidation compare, and where each one fits
• Refinancing after bankruptcy: the pathway back to a home loan after discharge
• Refinancing with a default on your credit file: how lenders read paid and unpaid defaults, and how to refinance around one
• Debt consolidation with bad credit: the full guide to consolidating with defaults, arrears, judgments, and hardship history