A record number of mortgage holders are refinancing to try to get the best deal available, according to data from Australia’s largest mortgage broker, AFG.
In the first mortgage sales data available for the year, the AFG Mortgage Index shows that 37.04% of mortgages arranged by brokers in January were for refinancing rather than property purchases, as consumers try to deal with home loan rate rises. This is the highest recorded level for the past 12 months.
The AFG Mortgage Index also shows that the usual seasonal uplift in property sales did not materialise in January, with a month-on-month increase in mortgage sales of just 5.6%, compared to a 20.5% uplift experienced in January last year.
“Potential property buyers are seriously concerned about the prospect of rate rises,” said Mark Hewitt, general manager of sales and operations at AFG.
“At the same time as they’re holding off buying properties, they’re also refinancing in record numbers to try to get the best mortgage deal available. The relatively low loan to value ratios we’re continuing to see show that middle income earners and first-time buyers are the worst affected sectors of the market.”
Hewitt added that the AFG Mortgage Index also reveals that the proportion of buyers choosing fixed rate mortgages remains near the high water mark, at 24.3% of all mortgages.
AFG is Australia’s largest mortgage broker and has 9% of the national market, according to ABS and AFG statistics. While AFG figures are not definitive, they’re usually strongly indicative of more comprehensive figures released later each month by other institutions.
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