Franchise sees big boost in refinancing

A major mortgage franchise has seen a jump in demand for refinancing, with data revealing customers are achieving big savings



Major mortgage franchise Aussie Home Loans has seen a jump in demand for refinancing, with data from the franchise revealing customers are saving an average of 0.71% on their home loan interest rates over the life of their loan. 

Aussie Home Loan chief executive officer James Symond says the franchise has experienced a 16% jump in demand for home loan refinance over the last three months, with refinancers now making up 35% of the mortgage broker’s total settlements.

This means, according to Symond, that interest rates, market uncertainty and mortgages are now “top of mind” for the average Australian.

“There is a great deal of attention now being paid to the future of interest rates, the property market and ongoing uncertainty over the economy. Even though rates have largely been coming down through RBA cuts and hot competition, borrowers are still seeking to refinance their loans,” he said.

“Our figures show that more and more of our customers are taking advantage of record low interest rates. They are actively seeking out and securing themselves a better deal, saving tens of thousands of dollars in many circumstances.”

Based on Aussie’s average refinance loan size of $525,331, the average 0.71% rate saving equates to $86,733.25 over the life of a 30 year loan.

Refinancers in NSW are making the most of refinance savings with an average 0.75% reduction, closely followed by Queenslanders saving an average 0.73% on their home loan interest rate.

According to Aussie’s data, owner occupiers are driving this growth in refinancing, up 23% of total settlements compared to a couple of years ago. On the other hand, the number of investors refinancing has fallen by 5% over the same period, or by 16% since just last financial year.

“There has been a significant level of policy and pricing change across the mortgage market, particularly around loan serviceability and investment lending, with a major factor being the lower LVRs now required by lenders, and I believe this is slowing investor refinance activity,” Symond said.

“The steam has also gone out of the first home buyer market as prices in many areas of the major capital cities are still very high and simply unattainable for them.”

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