Home loan refinancers are on the move and we look at reasons why this is happening now during COVID-19.
The number of mortgage-holders looking to refinance their home loan has surged in recent weeks, as home owners take advantage of record-low interest rates.
Recent data released by CoreLogic has shown that just over 75 per cent of property valuations requested in the month from mid-March to mid-April were for the purposes of refinancing.
Most lenders are reporting most of the home loan applications received in the last six weeks was related to refinancing, as the purchase of new homes has slowed amid COVID-19 restrictions.
Raneleigh Marks, principal of LJ Hooker Home Loans Toowoomba and Ipswich noted, “A lot of people, I imagine, are sitting at home thinking, ‘The future’s a little bit more uncertain than it was, we should probably look at where we can save a few dollars here and there’”.
Meanwhile, new data from LJ Hooker Home Loans has also highlighted a “major uptick” in the proportion of borrowers looking to refinance in the month to April 2020.
The home loan lender linked to one of Australia’s best known real estate brands showed a significant increase in demand for refinance from both owner-occupiers and investors, when compared to the previous month.
LJ Hooker Home Loans CEO Paul O’Regan said “A record-low cash rate means we are seeing some of the lowest mortgage interest rates in history, which is driving borrowers in droves to chase better deals over new property.”
Mr O’Regan noted that borrower’s also seemed eager to fix their rates given the current offers in the market and expected this trend to continue into May.
“The industry has seen a surge of activity around refinancing in response to COVID-19, with interest rates in the “2” per cent range on offer,” Mr O’Regan said.
“Speaking on behalf of LJ Hooker Home Loans we have fantastic deals on offer with no delays in loan approval times for eligible borrowers. It’s a great time to refinance.”
He made note that many have been hard hit by COVID-19 restrictions. However, for those who are not experiencing hardship or eligible for mortgage deferral periods, many borrowers have opted to “take advantage of record-low rates and refinance.”
Lenders like LJ Hooker Home Loans have also adapted to COVID-19 ensuring customers are protected during social distancing. “We’ve moved quickly so that our local lending specialists can work with their customers remotely, but also made sure the experience is simple and enjoyable. People still want to know they’re working with a trusted professional and you can now do that from the comfort of your own home”. Mr O’Regan said.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.