Refinancing records continue to fall

Australians are increasingly refinancing their mortgages through brokers, with the refinancing of loans taking up a larger percentage of new loan approvals, according to Australian Finance Group monthly index figures.

Refinancing accounted for 37 per cent of new mortgages in January 2008 arranged through AFG, up from 35.2 per cent in December 2007 and 33.5 per cent six months earlier in July.

AFG is the largest aggregator in the mortgage broking channel and publishes its new business figures promptly each month.

Mark Hewitt, general manager of sales and operations at AFG, said that luxury property sales for higher income earners had been supporting the market, but within the last month this has begun to show weakness.

"Luxury property has come off a bit, and this would have affected our figures last month (January sales)."

The total number of new AFG loans and the total value of these loans for January and December recorded their lowest levels for the preceding twelve months. Fixed loans in January accounted for 24.3 per cent of new loans, up slightly from December's 23.3 per cent and much higher than the July 16.5 per cent, where the standard variable was peaking at around 41 per cent.

X Inc Finance, which has a mortgage book about a quarter of the size of AFG's $44 billion, has in recent months experienced a dramatic surge in refinancing enquiries.

Jennifer Nielsen, CEO at X Inc, said refinancing enquiries had increased in January to 80 per cent of all enquiries, up from around 65 per cent in December, compared to the average 50 to 60 per cent range.