Suburban drive to move the mortgage
HOUSEHOLDS in the outer suburbs of the nation’s two most populous cities are driving a wave of mortgage refinancing as Australians chase the best deal to minimise interest rates pain.
The top 10 suburbs for mortgage refinancing across NSW, Victoria and Western Australia have been revealed, with Tarneit in Melbourne’s west the epicentre, PEXA analysis reveals.
In the year to date, 3831 households in the suburb have refinanced their mortgage, as the Reserve Bank hikes interest rates to battle inflation.
Kellyville, northwest of the Sydney CBD, was the most refinanced suburb in NSW with 1365 applications.
With 1064 refinancing applications, Piara Waters, south of Perth, topped Western Australia’s list.
A record number of households are refinancing mortgages in response to the RBA raising the cash rate from 0.10 per cent in April to 2.35 per cent.
“The top postcodes tended to be outer suburban postcodes, with high levels of development, such as Tarneit, Craigieburn, Kellyville,” PEXA Insights research head Mike Gill said.
“Even before the most recent lift in the cash rate, PEXA’s Refinance Index had already hit a record high in the week ending September 4.
“A clear correlation is evident between this year’s interest rate rises and mortgage refinancing activity, indicating that households are responding directly and proactively.”
In June, a record $18.16bn in mortgages were refinanced, according to the Australian Bureau of Statistics’ lending indicators.
Digital Finance Analytics principal Martin North said there was a significant level of mortgage stress in the “highgrowth corridors” surrounding capital cities. However, he said the regulator’s 3 per cent buffer on mortgages meant some households would not meet the criteria for refinancing.
“Suddenly they don’t fit between the normal parameters and now they’re stranded … mortgage prisoners,” he said.