More borrowers refinancing, but they’re not happy about it: MFAA

The proportion of people that feel satisfied when they refinance their mortgage has picked up recently but is still tracking well below satisfaction levels before the GFC, according to research compiled by the Mortgage and Finance Association of Australia (MFAA).

In September 2011, two months before the RBA introduced the first of its two rate cuts in November and December, research by MFAA shows that just under two-thirds (65%) of those who refinanced their mortgage were satisfied with the outcome.

This was up on the 53% satisfaction rating in May 2011 but well below the high of just under 80% who said they were satisfied in November 2008 – a period when the RBA was cutting rates by as much as 1% a month as the financial crisis deepened.

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The proportion of people that feel satisfied when they refinance their mortgage has picked up recently but is still tracking well below satisfaction levels before the GFC, according to research compiled by the Mortgage and Finance Association of Australia (MFAA).

In September 2011, two months before the RBA introduced the first of its two rate cuts in November and December, research by MFAA shows that just under two-thirds (65%) of those who refinanced their mortgage were satisfied with the outcome.

This was up on the 53% satisfaction rating in May 2011 but well below the high of just under 80% who said they were satisfied in November 2008 – a period when the RBA was cutting rates by as much as 1% a month as the financial crisis deepened. 

However, since then the percentage of borrowers satisfied with their refinancing decision has fallen steadily.

MFAA chief executive Phil Naylor says if one looks beyond the timeline of the chart to 2004, the percentage of borrowers satisfied was close to 90%.

According to Naylor, one of the reasons for this decline would be that there were more lenders on the market between 2004 and 2007.

“Non-bank lenders were still in the market and there were genuine choices as were you could go to refinance,” he says.

Naylor says the golden rule of refinancing is “you must be better off”.

For more expert tips on refinancing your mortgage download Property Observer’s free ebook: 12 tips for refinancing your mortgage.

 

 

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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