The number of Australian homeowners refinancing their mortgage has reached an all-time high, according to an analysis of consumer data.
The analysis of statistics compiled by the Australian Bureau of Statistics (ABS) by finder.com.au reveals that almost 22,000 Australians refinanced their mortgages in December 2015.
Bessie Hassan, consumer advocate at finder.com.au, says she expects that trend to continue.
“In fact, the total value of refinanced home loans is forecasted to reach $100 billion this year, an increase from the record $77 billion in 2015, according to finder.com.au research.
“With signs pointing to a rate rise in the near future, now is a great time for homeowners to consider refinancing. As it stands, the cash rate is at a historical low and providers are offering among the lowest rates ever seen – borrowers can potentially save thousands of dollars per year by making the switch to a better deal.”
Based on a $354,614 average 30-year home loan refinanced from the current 5.11% standard variable rate (SVR) to the average 3-year fixed rate at 4.59%, and assuming a return to the current SVR after three years, Hassan says the 21,896 Australians who refinanced their home loans last December collectively would have saved about $148 million in interest by fixing their mortgage.
“That’s an impressive $6,771 saving per homeowner over the fixed period of the loan,” she said.
Over the 12 months to December 2015, the number of home loans being refinanced has surged by 20%.
Further to this, interest in finder.com.au’s refinancing home loans hub has skyrocketed 331% in the past month, compared to the same period last year.
“This indicates that low interest rates and money savings are top of mind for borrowers – which is the way it should be,” Hassan said.