Home owners are rushing to refinance as ultra-cheap fixed-rate mortgages taken out during the pandemic roll off.
A record $13.4 billion worth of mortgages held by owner-occupiers was refinanced in November as home owners rushed to find a better deal amid aggressive interest rate rises.
Overall, $19.5 billion worth of mortgages was refinanced in November, 20.4 per cent higher than a year ago and eclipsing the record set in September last year by almost $1 billion. RateCity research director Sally Tindall said the statistics showed borrowers were acting to combat rising interest rates. By the start of November, the Reserve Bank had raised the official cash rate from 0.1 per cent in May to 2.85 per cent. It is now at 3.1 per cent. The banks have passed on all the rises in full to mortgage holders.
However, Morningstar head of equities research Peter Warnes warned on Friday that significant increases in the wholesale cost of funding could lead to the banks raising mortgage rates outside the official rate increases. UBS analysts expect $500 billion of fixed-rate mortgages to roll off before December 2024, and believe expect it will impact consumer cash flow next year.
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