Mortgage refinancing is hitting record highs: RateCity

While the value of new loans dipped this month, refinancing has skyrocketed to an all-time high in June.

Latest figures from the ABS show the total value of refinanced loans hit $16.24 billion in June, up $1.37 billion in just one month, in seasonally adjusted terms.

That $16.24 billion figure is made up of a record $10.84 billion from owner occupier's refinancing, up 112% on a year ago, and $5.41 billion from investors, up 67% year on year.

Refinancing has risen sharply in recent months, fuelled by record low rates. COVID has also prompted many families overhaul their finances.

In the past 12 months, $151.12 billion worth of mortgages have been refinanced, in seasonally adjusted terms.

RateCity.com.au research director, Sally Tindall, said the record high in refinancing in June suggested mortgage holders were racing to lock in low rates in case they rise.

“At the start of COVID, we saw a spike in refinancing as people rushed to lock in a competitive rate. COVID was a wake-up call for people to get their finances in order, and banks were at the ready, handing out some of the lowest rates in history,” she said.

“Over a year later and we’ve now hit a new record high, although this time, the surge is more likely to be fuelled by a fear of missing out."

“In the last five months, dozens of lenders, including the big four banks, have hiked many of their longer-term fixed rates. Taking these record-low fixed rates off the table has been the push some people needed to refinance," she added.