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By Joseph Ballota

Refinancing takes a back seat as new home loans make a strong comeback

New data reveals that in August, fewer people refinanced their loans compared to the previous month, but it was still the fourth-highest number since rates started going up.

This dip was expected because many people rushed to refinance before some banks ended their cashback offers.

Since rates began rising, borrowers have refinanced loans worth almost $309.17 billion to save money.

Total value of refinancing – August 2023

Aug-23 Monthly change Year-on-year change Total since start of hikes 
(May 22 – June 23)
$20.58 billion -$831 million


+$2.27 billion


+$309.17 billion

Total Value Of Loans Refinanced Last Five Years research director, Sally Tindall, said:

“Refinancing might have dropped, but it is nowhere near game over.

The latest ABS figures show over $20 billion worth of home loans refinanced in the month of August, which is the fourth highest on record.

While some of Australia’s biggest banks have turned their backs on the cutthroat refinancing market, there are plenty of smaller lenders offering competitive rates, and in some cases, cashback in a bid to tempt more borrowers to."

Owner-occupiers back in the market

The new figures reveal that in August, people buying homes to live in were approved for more than $16.07 billion in loans, which is 2.6% higher than the previous month.

This is a positive change after two months of decreases.

Investors also increased their loan approvals by 1.6%.

However, when compared to the same time last year, both people buying homes to live in and investors have seen a decrease in loan approvals.

Value of new home loans approved in August

Value Monthly change Year-on-year change
TOTAL $24.82 billion +$543 million -$2.5 billion
2.2% -9.4%
Owner-occupier $16.07 billion +$407 million -$2.3 billion
2.6% -12.5%
Investor $8.75 billion +$136 million -$268 million
1.6% -3.0%

Borrowers opting for fixed rates drop slightly

After rising for two months, the percentage of new and refinanced loans with fixed interest rates fell to 8% in August 2023.

This is a significant drop from the high point of 46% in July 2021 when many borrowers chose fixed rates.

This shift probably happened because borrowers were anticipating possible interest rate cuts.

Value Of New Loans Fixed Vs Variable

Ms Tindall commented:

“Unsurprisingly, the proportion of new and refinanced loans opting for a fixed rate dropped in August as borrowers opt to stick to variable rates until they get a clearer picture of where the cash rate will settle.

Many borrowers are opting to stay shackle-free on a variable rate for now until they see if and when the forecasted rate hikes materialise.”

About Joseph Ballota Joseph is a Property Coach who put hundreds of people on the road towards wiping away their mortgage in under 5 years through expert Property Investment Plans.
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