Homeowners rush to refinance

Oksana Patron

14 October 2022

A record of $14 billion worth of home loans were refinanced with a new lender in Australia in August as panicked homeowners are rushing to refinance in record numbers, according to an analysis from comparison site Finder.

This represented an increase of 13% over the month and 20% over the year, according to the data from the Australian Bureau of Statistics (ABS).

Since the Reserve Bank of Australia (RBA) began to rise cash rates in May, those with a $500,000 mortgage are currently facing a $735 a month hit to their budgets which translated into $8,820 more per year.

Finder’s Consumer Sentiment Tracker revealed that in the last 3 months, 1 in 4 (25%) borrowers struggled to pay their home loan.

Graham Cooke, head of consumer research at Finder, said borrowers were scrambling to cut costs on their mortgage where they could and repayment spikes were just too much to manage for millions of households causing a rush to refinance.

“Refinancing to a better deal can dramatically lower your costs and increase your savings,” he added.

“With at least one more rate rise predicted in the short term – the full impact of increasing rates is not expected to be felt until early next year.”

“Loyalty doesn’t pay – shop around for the best deals on all your expenses.”