More than one million Australians refinanced their home loan over the past 12 months, saving an estimated $1,524 per year on average. PEXA Insights’ latest report, the PEXA Refinancer Sentiment Research Report, reveals that Australians who refinance their mortgage to a new lender save an estimated $1,908 per annum on average, compared to an estimated average saving of $384 per annum for homeowners that refinanced with their existing lender.
The nation has experienced record refinancing activity, with PEXA’s Refinance Index reaching 201.1 in the week ending 4 September. And there are no signs of this trend slowing, with the PEXA Refinancer Sentiment Research Report released today, revealing that almost 2.3 million Australians were considering refinancing in the next two years.
There are currently nearly eight million Australian mortgage holders, and analysis from the report suggests 31.2% of mortgage holders are in the ‘refinancing mindset’. Of note, 81% of those who recently refinanced expected to refinance again within the next two years.
Although the PEXA Refinancer Sentiment Research Report (with research conducted throughout May and June 2022) suggests there are considerably more savings to be made by switching lenders, 55% of recent refinancers stayed with their existing lender when refinancing.
Further key insights into refinancing consumer behaviour include:
- Homeowners refinanced their home loan on average an estimated 5.6 years after purchasing the property.
- The top reasons for refinancing were:
1. Wanting a more competitive interest rate
2. Needing to save money
3. Broker recommendations.
- The top three barriers to refinancing were:
1. Interest rate instability
2. The onerous application process
3. Current lender providing a competitive rate
PEXA Insights Head of Research, Mike Gill comments: “More and more Australian consumers are hunting out the most competitive interest rates, leading to record high levels of refinancing. This momentum is set to continue, as mortgage holders are investing on average six weeks into researching options that best suit their circumstances.”
“Our consumer research confirms there is a level of uncertainty felt by mortgage holders, with an estimated 71% feeling anxious about the prospect of rising interest rates, 49% worried about their job/financial security, and 73% are regularly reviewing their interest rate against market trends.”
The estimated average value of properties being refinanced was $732,000, and in most cases it was the refinancer’s primary residence. On average, refinancers had approximately $491,000 remaining on their home loan, with an estimated average of 34% of the household income being spent on mortgage repayments.
For more information, visit PEXA’s data and insights.
The research contained within the PEXA Refinancer Sentiment Research Report was undertaken by Nature Research, commissioned by PEXA Insights, with the aim to provide new insight into Australian property owners’ attitudes and behaviours regarding refinancing their home loan.
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PEXA (Property Exchange Australia) is Australia’s online property exchange network. It assists members – such as lawyers, conveyancers and financial institutions – to lodge documents with Land Registries and complete financial settlements electronically. PEXA was formed in 2010 to fulfil the Council of Australian Governments’ (COAG) initiative to deliver a single, national e-Conveyancing solution to the Australian property industry. It was originally known as National e-Conveyancing Development Limited. PEXA is committed to supporting the property industry as it transitions towards a 100 per cent digital conveyancing process that’s fast, safe and efficient.
Since 2014, more than 13 million transactions have occurred via PEXA, and today, more than 85% per cent of all property transfer settlements in Australia are processed on the PEXA platform.