New data shows that refinancing loans rose to 22.1 per cent of all loans in 2007-08, up from 17.6 percent the previous year. Bernie Lewis Home Loans said home loan refinancing is on the rise as homeowners seek a better deal on their mortgage.
The figures seem to indicate that people are feeling the strain and seeking out better home loans in an effort to find a better deal to save them money.
There has also been a increase in people opting for variable rate home loans. Bernie Lewis Home Loans have provided data that shows fixed rate loans were close to 50 per cent earlier this year, but have now dropped back to around 30 per cent.
"In periods of stable interest rates, people tend to become complacent about their home loans and credit in general. However, when rates rise there is a necessity to look more closely at the loan arrangements,'' he said.
"With petrol prices going up, the cost of living going up and interest rates going up, people are hitting the limits and asking how they can reduce costs.
"We always advocate you should review your loan at least every couple of years anyway, because it's such a dynamic market with new products, new features and new benefits.''
Many are predicting the Reserve Bank of Australia will cut official interest rates by as much as 0.50 percentage point, as early as next month. The big banks have not confirmed that they will drop their home loan interest rates, but many believe if the RBA lowers offical rates, it is only a matter of time before the banks do lower their rates. Earlier this month, several banks dropped their fixed rate home loan rate, and now borrowers wait to see if the variable rates are cut in the coming months.
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