Mortgage refinancing at four-year high as non-major bank lenders pick up market share: ABS

Nearly 18,000 borrowers refinanced their home loans in March, the biggest number of refinanced home loans in one month since April 2008, according to ABS figures.

In addition, there was a 19% increase in refinanced home loans for the 12 months to March 2012 compared withfsd the previous 12 months, according to further calculations by mortgage comparison website

On a state-by-state level, NSW borrowers were the most active switchers in March, with 41% of all loans comprising borrowers ditching their lenders for better deals. Victoria followed, with 38% of all home loans financed in the state refinancers.

Before the increase in refinancing, ANZ increased its standard variable rate by 0.06 percentage points on February 10 while lenders continued to decrease their fixed-rate mortgages over the month, including CUA, which cut its three-year fixed rate by 39 basis points on February 13.

May 2012 figures released by mortgage broker AFG also revealed an increase in refinancing activity, with borrowers showing a greater willingness to move away from the major banks and refinance with a non-major lender.

Non-major lenders grew their share of the mortgages refinanced by AFG brokers from 24% to 26% over the three months to May 2012, compared with 21% for the last six months of 2011.

Non-major lenders with greatest market share were Suncorp (3.6%), AMP (3.5%) Macquarie (2.5%) and ING Direct (2.1%).

Among the smaller lenders to record an increase in refinancing activity has been the Greater Building Society, which says it is continuing to experience an increase in people wanting to switch from the major banks and other financial institutions.

Product manager David Bryde says that to the end of April 2012, the number of customers refinancing to The Greater is up 24.6% on the same period last year following previous apathy and misinformation about switching lenders.

“People are starting to vote with their feet as they realise that there are large, safe, well-run alternatives to the major banks offering more competitive rates, lower fees and better service,” Bryde says. 

“People can save thousands, sometimes tens of thousands of dollars by switching. 

“Switching is easier than people think and in many cases, people don’t even have to talk to their existing lender,” he says.

RateCity spokeswoman Michelle Hutchison says the number of borrowers who switch lenders is likely to increase in the coming months

“While there’s still a lot of work to do to make switching easier, it’s clear that Australian borrowers are far more comfortable switching their home loan than ever before, and the ban on exit fees for new variable rate loans since July 1, 2011 must be playing a part,” she says.

“We believe we’re only beginning to see the very start of the impact of these changes and it’s likely that more borrowers will switch lenders more often than in the past.”

{module Have you changed lenders in the last six years?}

{module What do you intend to do given the current interest rate fluctuations?}

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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