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Sydney’s Mortgage Refinancing: A Path To Increased Profit – Australian homeowners are switching home loans like never before, according to new data released today by the Australian Bureau of Statistics (ABS).
The latest ABS lending figures show that the value of refinanced home loans hit a “record” (seasonally adjusted) $17.2 billion in July, up 6% month-on-month.
Sydney’s Mortgage Refinancing: A Path To Increased Profit
Of this, owner financing accounted for $11.37 billion, and investors converted loans for $5.86 billion.
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“Refinance rates among lenders were 60% higher in July 2021 than a year ago. This shows that borrowers are looking for lower interest rates, especially on fixed loans, as well as a large number of cashbacks from mainstream and informal lenders. “, said Catherine Keenan, head of finance and wealth at ABS.
As Keenan points out, one of the reasons for the increase in refinancing is the relatively low interest rates on home equity loans.
With cash rates as low as 0.10 percent, mortgage lenders have also begun to cut variable and fixed rates in recent years. For example, here’s how the moving average and the 2-year fixed rate (for business owners) have changed since September 2019 in the database.
As the chart above shows, interest rates have dropped significantly, allowing many mortgage holders to refinance their existing home loans for more competitive deals with other lenders.
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Keenan also pointed to the large number of cash-back deals as another potential factor in customer churn in the mortgage market.
There are currently 23 lenders on the database that offer home loan cashback offers, including banks such as Commonwealth Bank, BOQ, ING, Newcastle Permanent and Westpac, many of which are aimed at refinancers looking to modify their loans. have been done.
And they are very inexpensive, currently ranging from $1,500 to $5,000. Although, as spokesman Tom Godfrey recently pointed out, refinancers want to make sure they’re getting a competitive rate on their cash-back offer.
“Lenders offer cash-back incentives for a variety of reasons, but this doesn’t always give you the best value for your loan. Therefore, it’s important to remember that one of the best ways to improve your cash position is to take advantage of it. You can find Get the best rates and avoid higher monthly payments.”
Home Loan Review: Is It Time To Refinance?
Ready to see if you can switch your home loan to a lower interest rate? Get started today by checking out competitive offers in the chart below or visit our home refinance loan comparison chart to compare offers from more lenders.
Note: This level of comparison only applies to the example or examples provided. Different funds and terms have different benchmarks. Costs such as refinancing or early repayment fees and cost savings (such as fee waivers) are not included in the comparison rates, but may affect the cost of the loan. Comparison rates are for a 25-year secured loan with monthly principal and interest payments of $150,000.
Initial monthly payments are calculated based on published interest rates only. You can change the loan amount and term in the input boxes at the top of this table. Interest rates, fees and charges, and the total cost of the loan may vary depending on the loan amount, loan term, and your loan history. Actual payments will depend on your personal circumstances and changes in interest rates.
Provide general product information. We do not take into account your personal goals, financial situation or needs and do not recommend any particular product. You should make your decision after reading the PDS or budget document or seeking independent advice.
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Tom Watson is a financial journalist and host of the Finance Burrito podcast, specializing in fintech, real estate and business banking. Whether reporting on banking trends or the latest product innovations, Tom’s mission is to keep our readers up to date with the latest Australian financial news. His work often comes from the press and social media. Tom has a BA in Journalism from the University of Technology Sydney. He is also ASIC RG146 (Level 2) certified and can provide general advice.
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For ‘at Risk’ Home Loans, It Might Be Time To Refinance?
Figures released as part of the latest ABS lending indicators show that $14.3 billion of home loans were refinanced in January through new lending, $9.2 billion from owner-occupiers and $5.1 billion from investors.
While totals fell by $14 billion in the quarter, the ABS noted that refinancing figures were still 18.7% higher than the same period in 2021.
In fact, January’s total was the ninth highest on record since the ABS began tracking refinancing data in 2004.
With $14 billion in home loans in January and a record $181 billion through 2021, some borrowers may be asking themselves, “Why haven’t I refinanced my home loan?” and “Will the change be problematic?” Is it worth it? ‘.
Refinance Mortgage Broker In Sydney
The decision to refinance is probably a simple yes or no decision, but there are many factors that can determine whether it’s worth it or possible.
For example, some mortgage borrowers cannot refinance with another lender if their loan-to-value ratio exceeds 80 percent. This may not make financial sense for those currently locked into a fixed rate with a high termination fee or someone who has already received a competitive rate.
If you can refinance at a lower interest rate, it’s worth the offer considering the potential savings, both in terms of monthly payments and total interest over the life of the loan.
Here’s an example using the average Australian home owner loan size ($618,729) for principal and interest payments over 20 years.
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This is just a typical range of home loan rates today, and it can be said that over a 20-year period there will typically be many interest rate changes for all mortgage holders. However, the bottom line remains the same: lower interest rates can help significantly reduce the cost of debt over time.
Do you want to know how much you can save by switching loans? Make your life easier by using our switch and savings calculator to use or stay up to date on refinancing offers by heading to our refinance home loan comparison chart.
Note: This level of comparison only applies to the example or examples provided. Different funds and terms have different benchmarks. Costs such as refinancing or early repayment fees and cost savings (such as fee waivers) are not included in the comparison rates, but may affect the cost of the loan. Comparison rates are for a 25-year secured loan with monthly principal and interest payments of $150,000.
Initial monthly
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