Is it time for you to refinance your home loan?
New research has revealed one in three mortgage holders plan on refinancing their home loan in 2023.
More than 1,000 home loan customers were surveyed, with 31% considering refinancing within the next 12 months. The research also showed that 44% of borrowers aged between 35 and 44 are considering refinancing, while 41% of borrowers have refinanced their loan within the past two years and 38% have used a mortgage broker before.
The survey found borrowers who had refinanced in the past two years were primarily driven by the desire to secure a better interest rate (58%) or reduce repayments (35%). Meanwhile, 16% said they refinanced because their lender wouldn’t give them the same interest rate as new customers.
Mortgage specialist Anthony Waldron said the broker franchise network was seeing growing confidence among Australian borrowers when it came to refinancing and this had resulted in a strong increase in borrowers exploring refinancing options.
“This is especially true when borrowers are feeling the pain of rising rates and if you’re considering refinancing your loan, it pays to speak with a broker,” Waldron said.
“As well as simplifying the refinancing process, they can also easily review a large range of lenders for customers. The research showed us that, on average, borrowers who refinanced with a broker saved $409 on their monthly repayments, compared to $249 for borrowers who went direct to their lender. These amounts can make a big difference over time.”
The survey found many still had reservations when it comes to refinancing, with the research finding the two most common concerns were being worse off financially after refinancing (59%) or that switching home loans would be a major hassle (58%).
“Our research found that 62% of respondents who have refinanced their home at least once did so via a broker and they said they chose to work with a broker so they could help them find the best deal (46%) and because it took the hassle out of contacting different lenders (44%),” Waldron said.
It is important for borrowers to be aware of the costs associated with refinancing.
We can help save you money in the short term & long term
“These can include a discharge fee and fixed-rate break costs from your existing loan, as well as an application fee, mortgage registration fee and sometimes stamp duty or a property valuation fee for your new loan. Your broker can work help you compare these costs to the savings you’ll get from switching to a lower rate, so you can decide whether it’s the right move for you.”
Waldron said more and more Australians turned to brokers to help them secure the best deal in the market, with mortgage brokers facilitating 71.7% of all new residential home loans in the September 2022 quarter.
MFAA CEO Anja Pannek said buying a home was often one of the most important financial decisions many Australians would make in their life.
“The fact we now have seven out of 10 borrowers choosing to use the experience and services of a mortgage broker to help them navigate their finance options is a testament to the trust and confidence that Australian home buyers have in mortgage brokers,” Pannek said.
If you need assistance with your mortgage or have any questions then please phone our office … we’re here to help, thank you.