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Date Published : Wednesday, March 12, 2008
The recent hikes in interest rates by the Reserve Bank of Australia have led to a record number of people looking to refinance their mortgages, according to a leading industry expert.
Earlier this month, the Reserve Bank increased rates to 7.25 per cent - the highest level for over 12 years and the sixth rate rise in just over a year.
A number of the nation's biggest home loan lenders - such as Commonwealth Bank, National Australia Bank and ANZ - have followed suit, increasing the rates of interest charged on their variable rate home loans.
As a result, more homeowners than ever before are looking to change mortgage lender, or refinance their home loan, in order to get a better deal elsewhere, Mortgage Choice's Warren O'Rourke said.
Last month, figures from the Australian Bureau of Statistics showed that the number of people refinancing their mortgages now exceeds 20,000 a month.
Of those refinancing, 70.4 per cent ended up with a lower interest rate and 64.8 per cent got better loan terms and conditions
Mr O'Rourke added: "If they've had a mortgage for more than four years, they would be better off than those who have had a mortgage for a only couple years because of the deferred establishment fees. If they've fixed the loan and break it they will have exit fees.
"If it's a new or different product within the same lender, the refinancing costs would be lower."
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