New research has revealed a growing share of borrowers are hitting a refinancing roadblock due to serviceability constraints.
Nearly half of mortgage brokers surveyed by the Mortgage & Finance Association of Australia (MFAA) said they were seeing more clients unable to refinance because they could not meet serviceability requirements.
The MFAA’s August 2026 Market Sentiment Survey of 588 brokers found 49.2 per cent were seeing an increase in clients unable to refinance due to serviceability constraints, more than double the 24.4 per cent who reported the same issue six months earlier.
The result represents a major turn in the refinancing market. In February 2024, 83 per cent of brokers said refinancing had become more difficult because of serviceability, before the figure fell to 42 per cent in February 2025 and improved further by August last year.
Sentiment turns negative
The refinancing findings sit within a broader deterioration in client confidence and expectations around household finances.
More than half of brokers surveyed (55.3 per cent) said their clients were feeling negative about their financial outlook, up from 24.2 per cent six months earlier.
Cost-of-living pressures were the most commonly cited cause of that pessimism, followed by tax changes announced in the federal budget and interest rates.
The survey also pointed to heightened concern about mortgage stress, with some 40.7 per cent of brokers expecting more clients to have difficulty meeting their home loan repayments over the next six months.
Most brokers reported that between 1 and 5 per cent of their clients were experiencing repayment stress, a sizeable rise over the prior six-month period.
A considerable cohort of respondents also placed the share of stressed clients between 6 per cent and 10 per cent.
MFAA CEO Anja Pannek said the findings reinforced the need to preserve responsible lending standards while ensuring borrowers with demonstrated repayment capacity were not locked out of potentially better loan options.
“Responsible lending must remain at the centre of our system. At the same time, borrowers who have consistently met their repayments should not be unnecessarily prevented from moving to a more affordable or suitable home loan,” she said.
“The findings reinforce the importance of lenders having appropriate exceptions processes that consider a borrower’s individual circumstances and demonstrated repayment history.”
Discounts still in demand
Despite the serviceability squeeze, the survey indicated that brokers are still helping borrowers secure savings and refinance outcomes where lending criteria can be met.
Almost all respondents (96 per cent) said they had helped a client obtain a discount from a lender during the past six months, while 95 per cent had helped a client refinance to a new lender.
The data also showed sustained demand from a range of client groups.
Some 89 per cent of brokers had assisted a client using a broker for the first time to refinance, the same proportion had helped first home buyers, and 93 per cent had assisted returning clients.
Pannek said these outcomes showed there could still be ways for borrowers to reduce their mortgage costs.
“Many borrowers may still have opportunities to reduce their repayments, even if refinancing is not immediately available. The first step is having that conversation early,” Pannek said.
“These results show the value of seeking support from a mortgage broker when lending conditions become more complex.”
[Related: 40% of prospective FHBs want expert help]
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