Owner-occupied demand surges for franchise

by Julia Corderoy03 Feb 2016
Investor lending has dropped by 10% for major mortgage franchise Aussie Home Loans, but owner-occupied lending has skyrocketed. 

Aussie’s December quarter loan figures show that the number of new home loans and refinance activity by investors dropped 10% compared to the same time in 2014.

However, the December quarter also saw a 27.6% rise in owner-occupiers refinancing their mortgages. In addition, there was a 6.5% rise in first home owner purchases.

The chief executive of Aussie, James Symond, said he expects even more demand from the owner-occupied and refinancing market.

“We expect the refinancing and owner-occupier purchases to continue to grow in 2016 as borrowers become more confident that the current historically low interest rate conditions will continue well into the year.

“Borrowers are getting the message that now is the right time to save money on their mortgage repayments through refinancing, with many continuing to make payments at higher levels to get ahead on their mortgage.”
According to Aussie, home owners are saving an average of 0.71% on their home loan interest rates when they refinance in the current market.

“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,” Symond said.

Based on Aussie’s average refinance loan size of $525,331, the average 0.71% rate saving equates to $240 on monthly repayments on a 30 year loan.

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