Mortgage refinancing continues despite flat property rate
Home owners are continuing to refinance their mortgages, even as the property rate remains flat, according to the latest Home Finance Index.
The index, by the Mortgage & Finance Association of Australia (MFAA) and Bankwest, surveyed more than 1,100 respondents, and revealed that one in four survey respondents (24.7 per cent) had refinanced their loan in the past two years. In the past year, 14.2 per cent of respondents had refinanced their loan. Both figures were an increase on the previous Home Finance Index, conducted in January.
“Even with a flat property market, there’s plenty of work for brokers who are talking to their clients,” MFAA chief executive Phil Naylor said. “In times of economic uncertainty, people with mortgages are looking at ways to make their loans more affordable,” he added.
Around 83 per cent of respondents considered it important to find out if a mortgage broker was a member of an industry body before deciding who would arrange a loan.
The index also showed that 45 per cent of those looking at borrowing or refinancing in the next three months would be most likely to select a variable home loan, a result similar to the last survey.
Fixed rate loans continued to be the least popular option, chosen by 16.3 per cent of respondents, although this was a slight increase on January’s figure of 15.5 per cent.
Around one in five of those surveyed (18.9 per cent) opted for a mixture of fixed and variable rates in the hope of getting the best of both options.
A majority of respondents (50.6 per cent) said interest rates were the key factor when selecting a mortgage product, a proportion far ahead of the next most important factor, fees and charges, selected by 15.5 per cent.
Bankwest head of specialist banking Ian Rakhit said the advantage brokers provide was “expertise and convenience, and above all else choice to the customer”.
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