First homeowners in Australia are seeking to refinance their home loans within two years of entering the property market, according to a research by LJ Hooker Finance.
The study found that 46 percent of first homeowners are searching for better mortgage deals despite being in the housing market for a short time.
Peter Bromley, Head of Finance at LJ Hooker, said the survey of over 1,000 homeowners revealed that first-timers choose the easiest mortgage option when they buy their first house, then later opt to refinance.
“(Their mortgage) is probably through their parents’ bank… they go where they find the opportunity.”
The survey revealed that over one out of five persons active in the property market plan to refinance their mortgage in the near future. Bromley noted that this could be due to changes in personal circumstances and stated that it’s critical to shop around.
“With interest rates and a home loan, which is probably the biggest part of their income every month, it sometimes gets up to 50 or 60 percent of their total income,” he said.
Around 20 percent of respondents said that interest rates are their primary concern when they refinance, while 17 percent said they are refinancing in order to consolidate debts.
John Arnott, Director of Products at ING Direct, said that it is important that homeowners are comfortable with their mortgage agreement, but they must also be careful when refinancing.
“It’s important they don’t get lured in by what I would say are probably short-term carrots.”
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