Finder’s Housing Market Report: Navigating Refinancing in 2023

Finder's Refinancing Report combines lending data with a survey of over 1,000 Australians who have recently refinanced their mortgage, or are planning to. This report seeks to better understand the behaviours and attitudes of the growing market of refinancers.

Key findings

• 60% of respondents were stressed about their mortgage before refinancing, falling to 49% after refinancing.
• The average refinancer had a variable rate of 5.01% before refinancing. After refinancing this dropped to 4.78%.
• 76% of refinancers say that the cost of living crisis has pushed them to look outside of the Big Four banks.
• The average loan size for a millennial planning to refinance is $412,581 – almost double baby boomers ($240,422).
• 1 in 5 (18%) respondents are not confident and 63% are only slightly confident in their knowledge of refinancing.
• 1 in 4 (24%) women are not confident in their knowledge of refinancing compared to only 1 in 10 (10%) men.

Record-breaking refinance figures

In late 2020 the Reserve Bank of Australia (RBA) lowered the the cash rate target to just 0.1%. This move spurred many Aussies to refinance to incredibly low interest rates. When the RBA began rapidly raising the cash rate in 2022, even more borrowers rushed to refinance as their home loans became more expensive.

The number of refinancers and the value of their loans has grown significantly.

• In July 2019 the average refinancer's home loan was $395,059.
• In June 2023 this had risen to $507,053, a 28% increase in 4 years.
• In June 2023 the total monthly value of refinanced home loans peaked at $22 billion.

More refinancers are leaving their old lender behind

In July 2019 just over half (52%) of refinancers were external refinancers, rather than internal refinancers getting a new loan from their current lender. By July 2023, almost three-quarters of refinancers (72%) were external refinancers.

Our expert says

"A home loan is a gigantic debt. But a properly managed home loan with a reasonable rate and features that suit a borrower's needs is also an incredibly useful financial tool and a means for people to achieve a greater level of financial freedom. In the current environment of higher rates and inflation, refinancing has never been a more important decision."

Richard Whitten

Money Editor

Mortgage stress persists even after refinancing

• 60% of homeowners were stressed about their home loans in the 3 months leading up refinancing.
• This fell to 49% after borrowers refinanced.

This suggests that even refinancing is not enough to fully relieve mortgage pressures in the face of a wider cost of living crunch.

Refinancers are not saving as much money as they could when switching

• The average refinancer had a variable rate of 5.01% before refinancing.
• After refinancing the average new variable rate was 4.78%, or a 23 basis point reduction.
• Assuming a borrower had the average refinancer loan balance of $507,053 and was switching from one 30-year loan term to another, that lower rate would save a borrower $71 a month.

Even after going through the home loan process at least once before, borrowers are in need of support and education when it comes to refinancing and finding the best deal.

Rebecca Pike
Senior writer, home loans

No loyalty to lenders when looking for a better deal

• 76% of refinancers say that the cost of living crisis has pushed them to look outside of the Big Four banks.
• Only 8% say they already bank outside the Big Four.
• 2 in 3 future refinancers (64%) plan to lock in their loan with a different lender.

Mortgage stress drives refinancing, especially among millennials

• 64% of millennial borrowers looking to refinance are doing so because of cost of living pressures.
• The average loan size for a Millennials planning to refinance is $412,581.
• This is almost double the average loan size for Baby Boomers ($240,422).

This is likely due to baby boomers buying when prices were lower, and having their loans for a longer time, allowing them to pay off more of their debt.

For homeowners, a proactive approach to financial management is paramount. Regularly reviewing and comparing home loan options ensures alignment with financial goals, while utilising digital platforms and comparison sites can simplify and demystify the refinancing process.

Graham Cooke
Money expert

There is a gender confidence gap among refinancers

• 76% of men manage the mortgage in their household. Only 56% of women manage the mortgage in their household.
• 24% of women are not confident at all in their knowledge of refinancing. For men this drops to 10%.
• 26% of men feel confident about refinancing. Only 14% of women say the same.

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Joshua Godfrey

Insights Analyst

Joshua Godfrey is an Insights Analyst at Finder, specialising in data analysis and identifying emerging trends through the Consumer Sentiment Tracker, a monthly survey on Australians' financial attitudes. He has co-authored Finder’s 2023 Green Report and 2024 Wealth Building Report, which have been widely quoted in top media outlets like the AFR and news.com.au. With a Bachelor of Business in Finance and Marketing and a Diploma of Creative Intelligence from UTS, Josh is passionate about uncovering patterns in consumer sentiment and exploring how they influence the future of finance. See full bio

Joshua's expertise

Joshua has written 29 Finder guides across topics including:

• Data and analytics
• Money trends