Home loan refinancing levels jumped to $ 24 billion in May

The value of home loans refinanced by Australian mortgage lenders has reached its highest level in years according to new figures from the Australian Bureau of Statistics (ABS).

Published last Friday as part of the Bureau’s monthly loan indicators, data shows that a total of $ 24 billion in home loans were refinanced in May, which, as the chart below shows, is the highest amount in more than two years.

Most of the change ($ 15.9 billion) was made by homeowners who, as a group, refinanced $ 2.3 billion more than in April, with an average loan of $ 454,121 .

Investors were also motivated to refinance their loans in May, swapping loans worth $ 8.19 billion, a monthly increase of $ 1.4 billion.

What is behind all this refinancing? There are a number of possible motivators for mortgage holders, although one of the main factors is likely low mortgage rates.

While 4 and 5 year fixed rates have started to rise in recent months as lenders have adjusted their rate outlook, shorter term fixed rates and variable rates are at some of the lowest levels in years. .

In fact, the average floating rates ^^ in the Mozo database for homeowners and investors recently dropped to their lowest level since we started tracking them in January 2015. Currently they are at:

  • 3.22%: For owner-occupiers who repay principal and interest
  • 3.63%: For investors who repay principal and interest

And these are only averages! There is now more than 50 lenders in our database with at least one variable-rate mortgage offered to owner-occupiers with an interest rate of less than 2.50%.

So for borrowers who have not refinanced their credit at a lower rate in recent years, what savings can we offer? Here is an example.

Suppose homeowners Ava and Marc want to refinance their $ 400,000 loan (OO,

According to our home loan repayment calculator, the couple would not only be able to reduce their monthly repayments by $ 143, but they would save $ 34,341 in total interest over a 20-year period.

RELATED: $ 3,000 in cashback: ING unveils new incentive for mortgage refinancers

Last time you registered to see how your own home loan rate is measuring? Start comparing rates today with our handy refinance home loan comparison chart, or check out some of the great deals available for refinancing from lenders below.

^^ Average variable mortgage rates are taken from loans tracked in the Mozo database and are based on a loan amount of $ 400,000 and a loan-to-value ratio of 80%. For more averages and numbers, see our home loan statistics page.

* CAUTION: This comparison rate only applies to the example (s) given. Different amounts and terms will result in different comparison rates. Costs such as redemption or prepayment charges, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is that of a guaranteed loan with monthly repayment of principal and interest of $ 150,000 over 25 years.

** The initial monthly repayment figures are only estimates, based on the advertised rate, the loan amount and the foreclosed term. The rates, fees and charges and therefore the total cost of the loan can vary depending on the amount of your loan, the length of your loan and your credit history. Actual repayments will depend on your personal circumstances and changes in interest rates.

^ See information on the Mozo Experts Choice Home Loan Awards

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