Refinancing activity is tipped to soar in coming months as interest rates look almost certain to fall.
The RBA signalled this week that a drop in rates may not be far away.
Borrowers already hurt by rising fuel and food costs, on top of other financial commitments, are likely to be on the hunt for a better mortgage rate once the RBA decides to move.
Mark Haron, principal of Connective, said the current market has promoted borrowers to take a hard look at their living costs, which includes their mortgage.
“You’ve got Wayne Swan out there telling people if they’re not happy [with their mortgage] to shop around; and brokers are the best people for borrowers to go to to do that,” he said.
Smartline director Joe Sirianni said the potential for refinancing business would only increase as interest rates started to come off.
He estimated refinancing could account for as much as 40-50 per cent of brokers’ business as interest rates fall.
“There is always more refinancing activity when the yield rate curves down and interest rates drop. So when interest rates do start to ease, borrowers will certainly be looking around to find a better deal,” he said.
Results of the latest Mortgage Business straw poll have also highlighted broker expectations that refinancing presents positive business prospects.
More than 40 per cent of respondents said refinancing would offer the most business potential in the next six months. Other areas respondents could choose from included non-conforming, debt consolidation, investors, first home buyers and those upsizing or downsizing.
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