Recent data released by CoreLogic has shown that just over 75 per cent of property valuations requested in the month from mid-March to mid-April were for the purposes of refinancing, while industry players have also noted the trend.
Last week, the CEO of ANZ, Shayne Elliott, noted that most of the home loan applications the major bank received in the last six weeks were related to refinancing, as the purchase of new homes has slowed amid COVID-19 restrictions.
“But a lot of people, I imagine, are sitting at home thinking, ‘The future’s a little bit more uncertain than it was, we should probably look at where we can save a few dollars here and there’,” Mr Elliott said.
Meanwhile, new data from major brokerage Mortgage Choice has also highlighted a “major uptick” in the proportion of borrowers looking to refinance in the month to April 2020.
The brokerage’s data showed a 16 per cent increase in demand for refinance from owner-occupiers, and a 14 per cent increase for investors, when compared to the previous month.
Mortgage Choice chief executive Susan Mitchell said: “A record-low cash rate means we are seeing some of the lowest mortgage interest rates in history, which is driving borrowers in droves to chase better deals over new property.”
Ms Mitchell noted that borrowers were also eager to fix their rates, based on the April data, with the trend expected to continue into May.
“Mortgage Choice home loan application data reveals that demand for fixed rate home loans surged almost 8 percent over the month to April 2020 and application data from the first few days of May suggests that demand for fixed rate home loans is only set to increase.”
Finsure Group’s managing director, John Kolenda, has likewise stated that the aggregation group has seen a “surge of interest” from mortgage-holders looking to refinance their loan in recent weeks.
“We have seen a surge of interest in refinancing in response to COVID-19, with interest rates in the low 2 per cent range on offer,” Mr Kolenda said.
“With some fantastic deals on offer from lenders, it’s a great time to refinance, and those that meet the lending criteria are certainly prepared to shop around for a better deal.”
He made note that many have been hard hit by COVID-19 restrictions. However, for those who are not experiencing hardship or eligible for mortgage deferral periods, many borrowers have opted to “take advantage of record-low rates and refinance.”