The number of home loan borrowers altering their mortgage arrangements surged to 37.3% in December 2014, the highest rate since March 2012.
The AFG Mortgage Index report said refinancing increased over Q4 from 33.5% in September to 37.3% in December.
The study also said the proportion of borrowers opting for fixed rate loans dropped to 14.5% from 17.1% in November. A rise from 4.9% to 5.8% was seen in the proportion of introductory loans offered by lenders to incentivise borrowers to move from other institutions.
“The last time we saw refinancing at these levels, in March 2012, borrowers were acting to lock in rates, and fixed interest loans reached a four year high. This time round with speculation that interest rates are more likely to go down than up, borrowers are shopping around for the variable rate deal and avoiding fixed for the time being,” said Mark Hewitt, general manager of sales and operations.
The highest levels of refinancing across Australia belonged to Victoria (42.2%), followed by South Australia (41.7%), Queensland (39.9%), Western Australia (36.7%) and New South Wales (31.8%).
Meanwhile, first home buying figures dipped to 6.9% of all home loans processed nationally by AFG.