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Refinances ramping up across Australia: PEXA

There has been a significant uptick in customers switching lenders, with refinance volumes across states being as much as 26.7 per cent higher over May.

New monthly mortgage data from property settlement platform PEXA has shown that across Queensland, Western Australia, Victoria and NSW, there has been a substantial rise in customers refinancing.

In Queensland, refinance settlements had shot up by 21.8 per cent over May, and surged by 49.6 per cent year-on-year, up to a total of 6,699 mortgages.

There had been 11,315 new residential loans in the Sunshine State, up by 5.8 per cent from April, and up 5.1 per cent year-on-year.

The non-major banks’ net positive position in new loans remained flat from the month before, with a net increase in 896 new mortgages.

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At the same time, the segment’s position in refinances increased, with a net gain of 1,314 loans.

The major banks on the other hand slipped in net new loans, with their net loss of 781 loans over the month.

In refinances, the big four saw a more severe net loss of 1,355 loans.

In Western Australia, refinance settlements had rocketed up by 25 per cent, to a total of 3,244. Refinances had also surged from the same period the year before, up by 46.1 per cent.

There had been 6,191 new loans over the month, up by 2.3 per cent from April and 0.8 per cent higher year-on-year.

The major banks showed some growth across of both refinances and new lending, seeing their net-negative position shrink slightly over May, with a net loss of 271 new loans.

The big four had experienced a net loss of 186 loans in the refinances category.

Meanwhile, the non-major banks saw their position slightly shrink across both areas from the month before, with their net gains of 603 new loans and 175 refinances.

In NSW, refinance settlements, at a total of 10,838, were up by 20.8 per cent over May, and 15.6 per cent higher year-on-year.

There had also been 11,449 new residential loans settled over May, 4.6 per cent up on April, but 12 per cent lower year-on-year.

While the major banks’ net-positive position in new lending grew over the month, with a net increase of 758 new loans, they declined in refinances – with a net loss of 1,848.

Meanwhile the non-major banks had a net gain of 816 new loans and 1,778 refinances – slipping month-on-month in new lending, but steadily growing in refinances.

In Victoria there had been 11,500 refinance settlements over May – surging by 26.7 per cent from April, and were 23.3 per cent higher year-on-year.

There had been 10,637 new residential loans over the month in Victoria, up 8.3 per cent over the month and down 4.9 per cent year-on-year.

The major banks had marginally grown their net-positive position in new loans, with a net gain of 1,054 mortgages, but the big four had fallen in refinancing, moving further into the net-negative territory with a net loss of 1,857 loans.

Meanwhile the non-major banks secured 1,320 net new loans over May and 1,784 net refinances – growing their net position across both segments.

A recent survey from Mortgage Choice has shown more than half of borrowers are reluctant to refinance, seeing it as a hassle (60 per cent) or being cautious in case they ended up worse off (61 per cent).

This was despite mortgages being the largest monthly expense for the vast majority (80 per cent).

The majority of borrowers surveyed had also agreed that brokers can get the best deals on home loans.

However as the RBA continues to raise rates, NAB chief executive Ross McEwan has said he expects more customers to start shopping around.

[Related: Housing affordability continues downward spiral: REIA]

Refinances ramping up across Australia: PEXA
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