With interest rates at record low levels, the number of homeowners refinancing skyrocketed to an all-time high in July. Today we’ll run you through why so many people are refinancing, and why you should consider doing so too.
We’ve discussed the concept of refinancing in the past, explaining what it is and how it could be beneficial for you. We are currently seeing more people refinance their home loans than ever before, and the latest ABS figures show this.
Refinanced home loans reached an all-time high of $17.2 billion in July, which is a 6% increase on June.
It’s also more than double the value that was refinanced exactly two years prior in July 2019.
Why are homeowners refinancing in record numbers?
For starters, the RBA cash rate is at an all-time low of 0.1% following six rate cuts in three years.
As such, competition amongst lenders is fierce, with many offering record-low home loan rates in a bid to win over as many customers as possible.
In fact, RateCity reports the number of variable rates under 2% on its database has jumped from 28 to 46 in just two months.
Borrowers are also opting to lock in their interest rate too, says the ABS, following reports that lenders have started increasing the rates on 3-5 year fixed-rate loans.
“Borrowers are seeking out lower interest rates, particularly for fixed-rate loans, and cashback deals across a large number of major and non-major lenders,” says ABS head of Finance and Wealth, Katherine Keenan.
COVID-19 is likely increasing the number of homeowners refinancing, too.
With many households and businesses around the country doing it tough right now, one simple way to reduce your monthly mortgage repayments is by refinancing.
How we help you refinance the right way
We have produced many great resources to help our clients. Our refinance calculator will give you a great understanding of your position so that you’re ready to come and talk to us.
If you need more information on refinancing, we have other articles on our website that discuss what it means and the possible benefits that it could have for you. It’s important to understand the ins and outs of refinancing so you can be sure it’ll be the most appropriate solution for your situation. Additionally, we can walk you through the process and ensure that you are fully educated on the subject.
If you haven’t refinanced in the past few years, get in touch with Emmanuel, Marc or Daniel and we could help you save thousands of dollars in interest repayments on your mortgage.
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