Australians Refinancing Their Home Loan
Why are a record number of Australians refinancing their home loan?
There are several reasons why there are a record number of Australians refinancing their home loan. Certainly in 2020 - early 2022, the main reason is that interest rates have fallen in recent years, making it more affordable to borrow money. This may have prompted some homeowners to refinance their mortgage in order to take advantage of lower interest rates and save money on interest over the life of the loan.
In contrast, in the later parts of 2022 there were also a record number of Australian's refinancing for the opposite reason: interest rate rises.
Another reason for the increase in refinancing may be a desire to switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage. With an ARM, the interest rate can change over time, which can make it difficult to budget and plan your monthly payments. By refinancing to a fixed-rate mortgage, homeowners can lock in a steady interest rate and avoid the uncertainty of an ARM.
Additionally, the COVID-19 pandemic may have caused some homeowners to experience financial hardship, leading them to refinance their mortgage in order to reduce their monthly payments and make their finances more manageable.
In conclusion, the record number of Australians refinancing their home loan may be due to a combination of factors, including lower interest rates, a desire to switch to a fixed-rate mortgage, and the need to manage financial hardship caused by the COVID-19 pandemic.
Speak to a mortgage broker today about refinancing to consolidate debt and set yourself up for a better financial future.