Refinancing on the table for one in four
Nearly a quarter of homeowners are considering refinancing their mortgage, with a large percentage looking to fund a renovation or purchase another investment property.
According to a survey by brokerage Mortgage Choice, 24 per cent of the 1,032 respondents are considering refinancing their current home loan and 36 per cent of these have had their home loan for four or less years.
Mortgage Choice’s head of corporate affairs, Belinda Williamson, said cost was by far the biggest motivator when it came to refinancing.
"Of those considering refinancing their current home loan, 45 per cent of respondents said they would do so to switch to a 'cheaper' loan, with cheaper defined as a combination of a lower interest rate, fees and charges,” she said.
Other reasons given for refinancing were also connected to cost cutting, with 22 per cent of respondents saying they were considering refinancing to lower their repayment level, 21 per cent were looking at consolidating their debts and 19 per cent wanted to lower their fees.
"While cost was clearly top of mind for mortgage holders, it was great to also see some homeowners looking at refinancing to improve their lifestyle. For example, 14 per cent of respondents were considering refinancing to access additional funds for a renovation, while 10 per cent were looking at doing so to get access to funds for an investment property purchase," she said.
“At the same time, 13 per cent were motivated by the promise of having more money for other reasons, such as a holiday."
When refinancing, 62 per cent of respondents said they would consider changing both loan product and lender, while 38 per cent said they would stay with the same lender but switch loan product.
A majority of respondents said they would consider choosing a major bank. This was followed by a credit union and a building society.