Most mortgage brokers have received a material increase in clients reaching out for guidance for the first time this year, with the majority reporting increasing worries of rising repayments and the fixed rate cliff.

That’s according to findings by the Mortgage & Financial Association of Australia (MFAA), which surveyed 466 mortgage brokers on the trends they’re seeing in 2023.

“Australian homeowners are concerned about meeting repayments in the wake of persistent rate rises intended to curb inflation,” MFAA CEO Anja Pannek said.

“The vast majority of respondents attribute these concerns because of one key factor that does not represent discretionary spending – their mortgage.”

The Reserve Bank of Australia (RBA) has implemented a dozen rate hikes since May 2022, lifting the cash rate from a record low 0.1% to its current level, 4.1%.

Following the hikes, 93% of surveyed brokers report Australian homeowners are more concerned about meeting their mortgage repayments than they were six months ago.

Meanwhile, 80% said an increasing number of clients are unable to refinance their mortgage as they don’t meet serviceability requirements.

Recent research by PEXA found the number of Aussie homeowners refinancing their mortgages soared 14% year-on-year in the financial year 2023.

Assumably, the majority have refinanced their home loans to take advantage of more competitive rates on offer.

“Our members have customers coming through the door who’ve never used a mortgage broker, because they need support and they need assistance,” Ms Pannek said.

“While this is an indicator of growing mortgage stress, the silver lining is that 88% of brokers report they have helped negotiate a discount with their customers’ current lenders, while 81% have helped refinance a customer with a new lender.”

See More: Home loan offers and deals August 2023

And the worst of the mortgage cliff is likely yet to come. A large number of home loans are set to roll off of fixed rates later this year, figures from CommBank suggest.

Australia’s biggest bank’s full year earnings, released yesterday, revealed 9% of the lender’s home loan portfolio will come off fixed rates by December, with another 19% to roll off later.

So far, a third of its home loan-holders haven’t been impacted by the high rate environment, thanks to fixed rate home loans and a months-long lag between rate hikes and repayment increases.

“We expect this concern about mortgage repayments to increase over the coming months with more than 1.2 million borrowers coming off very low fixed rate terms throughout 2023 and into 2024,” Ms Pannek said.

“Negotiating a better deal, budgeting, debt restructuring, or extending the terms of a loan are all in the domain of a mortgage and finance broker, so I encourage homeowners to seek professional expert help, rather than struggling through this on their own.”


Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

VariableMore details
Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
Online ExclusiveUp To $4K Cashback

loans.com.au – Variable Basic Cashback Home Loan (Principal and Interest) (LVR < 70%)

  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
VariableMore details
Refinance OnlyApply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Refinance OnlyApply In Minutes

Unloan – Variable Rate Home Loan – Refinance Only

  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
VariableMore details
Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Unlimited Redraws

ubank – Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
VariableMore details
Unlimited RedrawsApply In Minutes
  • Low Deposit (<95% LVR) with No LMI required
  • Unlimited Redraw and additional repayments
  • No Application or ongoing fees
Unlimited RedrawsApply In Minutes

Sucasa – Ultra Low Rate (Variable) - <95% LVR - No LMI (New Purchases)

  • Low Deposit (<95% LVR) with No LMI required
  • Unlimited Redraw and additional repayments
  • No Application or ongoing fees
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of February 27, 2024. View disclaimer.

Image by LinkedIn Sales Solutions on Unsplash





Ready, Set, Buy!


Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy