PHOTO: Many homeowners felt new borrowers were getting better rates.
According to realestate.com.au nearly one in three mortgage holders is starting 2023 in the hopes of changing their home loan, with rising interest rates and the soaring cost of living prompting the decision.
Recent polling by brokerage group Mortgage Choice and market researcher Honeycomb Strategy showed about 31 per cent of mortgagee wanted to refinance this year.
Three groups were most likely to want to refinance, according to the research.
Almost half (44 per cent) of borrowers aged between 35 and 44 were considering refinancing, along with 41 per cent of borrowers who have refinanced their loan within the past two years.
The other major group, accounting for 38 per cent of borrowers, hadn’t used a mortgage broker to get the original loan.
Mortgage Choice CEO Anthony Waldron said homeowners “feeling the pain” of rising rates was encouraging them to seek out their options.
Interest rates rose in the second half of 2022 at the fastest rate in nearly 30 years.
Borrowers who have refinanced in the past two years and wanted to do so again were primarily driven by the desire to secure a better interest rate or reduce repayments.
Others said they wanted to refinance because their lender wouldn’t give them the same interest rate as new customers.
Mortgage Choice Hurstville/Penshurst broker George Boustani said homeowners were starting to worry about the prospect of further rate rises and how it would affect them.
Many of those who wanted to refinance bought their homes when the market was much more competitive. Picture: David Swift
“It’s mostly fairly recent owners who have done it,” he said. “They have never been in an environment where rates are going up.
“Older homeowners are more inclined to refinance if they want cash out for personal use.”
Plenty of borrowers said they still had reservations.
The research revealed that the two most common concerns were that they may end up worse off after refinancing or that switching home loans would be a major hassle.
Mr Waldron said the option wouldn’t work for every homeowner.
“It’s important borrowers are aware that there are costs associated with refinancing,” Mr Waldron said.
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