Home loan refinancing levels ramping up: ABS

By Tom Watson · · 2 min read
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New figures released by the Australian Bureau of Statistics (ABS) on Tuesday show that the number of Australian homeowners who are switching their mortgages is on the rise.

$22.6 billion worth of home loans were refinanced during March according to the ABS’s latest monthly lending indicators report, which is a 21% increase on the February refinancing figure of $18.8 billion.

Of that total, which is in real terms and not seasonally adjusted, $15.1 billion came from owner occupiers while $7.5 billion came from investors - both of which were significantly up on previous months.

In fact, as the graph below shows, March had the highest level of refinancing we’ve seen in almost a year. But that begs the question: what’s encouraging mortgage holders to make the switch on their loans?

“There will be numerous motivations behind the decisions to refinance, but one likely reason is the abundance of low rates on the market at present,” says Mozo Banking Expert, Peter Marshall.

“These offers may have finally tempted people who have been stuck on a product with higher rates to take advantage of the savings that can be gained by switching.”

Just how low are home loan rates, though? Well, the average variable rates in the Mozo database for owner occupiers (3.26%) and investors (3.66%) making principal and interest repayments are both at the lowest points they’ve been since our tracking began in 2015.

And the same is true for many of our average fixed home loan rates for owner occupiers, as the 1-year (2.33%), 2-year (2.28%) and 3-year (2.32%) fixed rate averages in our database are the lowest we’ve recorded. 

The story is a little different for longer term fixed rates though. In the last month a number of lenders have hiked their 4 and 5-year fixed rates - a trend which may fuel even more refinancing as mortgage holders seek to make the switch while the going’s still good.

“It seems pretty clear that we hit the lowest point in the current rate cycle a couple of months ago and all indicators suggest that rates will only increase from here,” Marshall says.

“Some lenders are already increasing fixed rates for longer terms, so anyone looking for the certainty that a fixed rate can give over a longer term, might not want to delay locking one in.”

It’s not just refinancers that appear to be taking advantage of low interest rates though. In the same lending indicators report the ABS revealed that new home loan commitments reached over $30 billion in March, which is a new record.

That figure was driven by a surge of investor activity, which accounted for more than half of the month-on-month increase.

RELATED: New home loans rise to surpass $30 billion

Time to make the switch to a more competitive rate? Get comparing today by paying a visit to our handy refinance home loan comparison table to compare rates, fees, features and more on offers from a range of lenders.

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Last updated 10 September 2024 Important disclosures and comparison rate warning*

Refinance home loan comparisons on Mozo

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  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.01 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,001
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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