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’re currently seeing more people refinance their home loans than ever before, and the latest ABS figures out this week prove we’re not imagining things.
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.
So 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.