Refinance shoots up 77% as Aussies race to refinance says Compare Club

Matthew Gatt, General Manager of Home Loans at Compare Club

Ahead of the announcement by the Reserve Bank, personal finance marketplace Compare Club revealed a 22% uplift in home loan enquiries in 2022 compared with the last six months of 2021. The broker data reveals Aussies are racing to refinance, with enquiries about refinancing jumping 77% between the second half of the 2021 and the first half of 2022.

What were the findings of Compare Club’s research?

Compare Club’s study showed that Victoria has consistently had the highest refinance versus purchase enquiry ratio of any other state in the past 12 months and has seen a 62.5% uplift in refinance enquiries in the last six months. The advice company’s data also shows:

  • While New South Wales has more refinance enquiries than Victoria, there are still more purchase enquiries coming through from New South Wales.

  • Queensland has seen the highest growth in purchase enquiries (92% in the last 6 months)

  • The average value of a purchase enquiry loan has risen by 5% in 6 months.

It seems New South Wales residents are keen to take advantage of a cooling market, as the state saw a whopping 146% uplift in refinance enquiries in the last six months and a 91% growth in new purchase enquiries. With Victoria having the highest average property value for refinancing, the state’s residents seem to be the most desperate to refinance home loans. 

How are homeowners in today’s economic climate?

“We’ve been calling on homeowners to review their home loans and that message seems to be starting to sink in, as we’ve seen record numbers of refinancing enquiries already this year,” said Compare Club General Manager of Home Loans, Matthew Gatt

“While the recent spate of interest rate rises have buyers and owners concerned, the good news is that there are still some very competitive fixed term loans available when you look beyond the big four banks, but there’s no telling how long they’ll remain on the market for. There’s also some great variable rate options too, so there are really more options than ever to choose from when reviewing your mortgage through a broker,” Gatt further commented.

“It is a market where it pays to take action now. Homeowners are seeing huge repayment rises and every day counts. The Banks have continued to reprice their mortgages even before the RBA makes any official announcements. Commonwealth Bank’s unprecedented 1.40% hike on fixed term mortgages last week kicked off another round of rate rises from the banks, which will price some people out of the security of a long-term fixed loan.”

What strategies can help Aussies stay atop?

“There are strategies that households can employ, such as paying extra on your mortgage if you can afford it or speaking to your lender to renegotiate your loan. But the best thing any homeowner can do is speak to a mortgage broker or a financial professional. A few phone calls could save you thousands of dollars in repayments,” Gatt further commented.

“The same goes for anybody looking to buy. The housing market is showing signs of cooling but buyers need to know their local market. Some cities or suburbs may have slowed down but that’s not the case for the whole of Australia. For example, in the first six months of this year, we’ve seen a 92% increase in enquiries from people looking to buy in Queensland.”

“That will undoubtedly affect the local property market, so the more prepared a buyer is by getting pre-approval and working with a financial professional to understand their budget, the better position they should be in several years down the track,” Gatt concluded.

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