Refinancing supporting home loan demand

Home loan demand rose slightly in July, underpinned by an increase in refinancing commitments, according to new data from the Australian Bureau of Statistics (ABS).


September 10, 2018

Home loan demand rose slightly in July, underpinned by an increase in refinancing commitments, according to new data from the Australian Bureau of Statistics (ABS).

The latest Housing Finance data from the ABS reveals that, in seasonally adjusted terms, 52,647 home loans were approved throughout July - an increase of 0.4% from June, which was supported by a 3% rise in refinancing commitments.

“The data indicates that Aussie borrowers are shopping around for a better deal,” said Mortgage Choice Chief Executive Officer Susan Mitchell.

“In July we saw an increase in the number of home loans approved and an increase in the value of dwelling commitments,” she said.

The data reveals that $31.4 billion worth of dwelling commitments were made over July, an increase of 0.4% from the month prior and the value of owner-occupied housing loans rose 1.3% to $21.1 billion.

“Looking ahead, I suspect we may see an increase in refinancing commitments as three of the nation’s major lenders recently announced they would be increasing the interest rates charged on their variable rate home loan products.

Ms Mitchell said, the current downward trajectory of national dwelling values could support home loan demand over the coming months.

“According to CoreLogic national dwelling values fell 0.6% in July, led by a 0.6% drop in Sydney and a 0.9% drop in Melbourne, which together have a significant effect on the national housing market’s performance,” Ms Mitchell said.

Looking ahead, Ms Mitchell said she expected home loan demand to remain stable as easing property prices may encourage once cautious buyers to enter the market.

“The complex lending environment and rising interest rates makes now a perfect time to review your home loan. If you do not know the interest rate you are paying on your loan or are unsure as to whether you are in the right product for your needs, speak to a qualified mortgage professional.

“Borrowers should keep in mind that lenders will be competing for high-quality borrowers who satisfy new, stricter lending criteria. For this reason, I could urge anyone looking to secure housing credit to get financially fit in order to improve their chances of success when applying for a home loan.

“Moreover, when they are ready to apply for a loan, they should speak to a qualified mortgage professional who will be able to suggest an appropriate loan for their unique financial situation,” Ms Mitchell concluded.


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