PEXA Refinancer Sentiment Research
New research from PEXA Insights uncovers homeowners attitudes and behaviours towards refinancing their home loan. In the current environment of rising interest rates, record numbers of homeowners are choosing to refinance their home loan with many opting to switch lenders.
With refinancing at all-time highs, we aim to shed light into why owners are refinancing, what influences their decision and the outcomes they hope to achieve.
Highlights
Of the nearly 8M Australian mortgage holders, an estimated 2.48M had refinanced their home loan in the past year or intended to in the next 2 years*.
A large group of Recent Refinancers were constantly looking for a better deal on their mortgage, with 81% stating they expected to refinance again within the next 2 years.
Key reasons for refinancing were:
- Wanting a more competitive interest rate,
- Needing to save money, and
- Broker recommendations.
The decision to refinance was highly rational with the most important loan features being the interest rate, ability to negotiate the rate and loan fees.
Home owners who refinanced on average saved an estimated $1,524 per year**
Home owners who switched lenders achieved on average an annual saving of $1,908 taking 4.2 weeks to finalise the refinance.
Home owners who refinanced with their existing lender achieved on average a $384 annual saving, completing the refinance faster in 3.0 weeks.
Overview
This research commissioned by PEXA and undertaken by Nature Research, aims to provide new insight into Australian property owners’ attitudes and behaviours towards refinancing their home loan. In addition to enabling settlements arising from the sale of a property, the PEXA exchange also facilitates property refinances, with over 99% of property refinances nationally in Australia completing via the exchange***. As such PEXA Insights is uniquely positioned to share timely trends into the refinance market.
*Refinancers estimated using survey data and ABS data on mortgage holders.
**Calculated using stated savings from Recent Refinancers in survey and based on an average loan size of $610K as reported by ABS in Jun-22. Assumes owner occupier with variable interest rate paying monthly principal & interest repayments over 30 yrs. Analysis only considers the interest rate and does not consider any other applicable fees. Savings relate to the interest rate only, they exclude any upfront or ongoing offers such as cashback incentives or rewards.
***As of June 2022, PEXA captured 99% of external refinances nationally. External refinancing is where the borrower refinances their home loan with a new lender.
