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Fresh figures from a mortgage comparison site have revealed that the number of Australians refinancing their home loans has surged despite the RBA’s decision to leave rates on hold.
According to RateCity.com.au, the proportion of people using the mortgage comparison site to switch home loans hit an “all-time high” in October, increasing 57 per cent on September, and 163 per cent over the past six months.
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Data insights director Peter Arnold commented that borrowers are no longer “waiting around” for the Reserve Bank to cut rates.
“Instead, they are taking the bull by the horns and getting a discount for themselves,” he said. “It’s becoming easier for people to get information about home loans and people are always looking to get a better deal.”
Mr Arnold said that although some home owners are hesitant to switch from a major bank due to loyalty and hidden administration fees, “it’s actually never been easier to switch”.
“The cost of switching is relatively small change. Our data shows that the average cost of upfront fees is $396, while 1,258 loans on the market have no upfront fees at all,” he pointed out.
“Switching a typical, $300,000, 30-year loan from the average rate to one of the best on the market could potentially save more than $80,000 in interest charges, and the switch costs would be recovered in three months,” he said.
According to Mr Arnold, refinancing figures suggest that Australians are “losing patience” with the big four banks.
“People are rightfully fed up with the big banks’ decision to withhold some of the last two rate cuts so it’s little wonder that we’re now seeing more interest in switching than ever,” he remarked.
Recent ABS data (August data released in October) shows a similar trend, with 20,000 new loans per month (34.8 per cent of all new loans settled) for the purpose of refinancing.
The total value of refinancing for this year was $84 billion, up from $72 billion last year.
