Borrowers switching deals en masse as crisis of confidence weighs
The mortgage market right now isn’t about jumping ship – it’s about savvy borrowers making sure they’re on the right ship for them.
According to Equifax’s February Consumer Market Pulse report, refinancing now accounts for 34% of total mortgage demand. Lenders are retaining many existing customers, with demand for refinance upgrades with the same lender up more than 15.2% year on year.
Refinancers seeking out a new lender are increasingly tapping the alternative lending space – there was a 44% year-on-year jump in customers switching to ‘large non-bank lenders’ in February.
It’s a continuation of refinancing trends seen throughout 2025, when nearly half a million dollars worth of home loans refinanced every minute at one point. ABS data shows mortgage refinancing jumped by 20% in 2025.
We can expect refinancing activity to stay elevated if, as is widely expected, more mortgage repricing gets underway in the weeks and months ahead.
Each of the Big Four banks – Commonwealth Bank, ANZ, NAB and Westpac, expects the Reserve Bank of Australia (RBA) to lift rates to 4.1% next Tuesday, with the likelihood of more hikes down the line becoming higher and higher.
This elevated volume of refinancing activity is a boon for Australian mortgage brokers who are guiding clients towards better, more suitable deals.
Think Mortgage has had an absolute ripper of a start to the year, volume wise, and March has seen no sign of slowing down. Such is the rate of refinancing submissions that founder Kapil Virmani (pictured, above) is looking to take on more back-end support just to keep up.
“People are calling me. They want to do a hedging on their current home loan. They want to see what cashbacks are being offered with other banks,” says Virmani.
He doesn’t sugarcoat it: “The best time to be in business is now if you want to be a broker.”
Virmani is not seeing much in the way of brand loyalty – whatever has the smallest number attached to it tends to be winning out.“With rate rises, cost of living high, fuel prices going up, people are looking to save every dollar or two dollars everywhere they can. The first thing they look at is their current mortgage.”
Crisis of confidence
The surge in refinancing activity is coinciding with a mini crisis of borrower confidence as economic worries both domestic and foreign start to weigh.
A new survey from the Mortgage and Finance Association of Australia (MFAA) of 433 brokers across Australia shows that almost a quarter of borrowers (24.2%) have a negative view of their outlook, an increase of 5.3% points since August 2025. More than half (55.3%) are neutral, an increase of 8.5 percentage points, with the remaining minority feeling positive.
It’s worth noting that this poll was conducted after the Reserve Bank of Australia (RBA) increased the cash rate to 3.85% in February, thus capturing the shift in sentiment resulting from the RBA’s decision.
There could be another sentiment recalibration on the horizon as the RBA meets once again in a few short days.
“With the Reserve Bank meeting on Tuesday and markets expecting further tightening, borrowers will be increasingly focused on managing home loan repayments and household budgets,” says MFAA chief executive Anja Pannek (pictured, left). “Ongoing global uncertainty, including tensions in the Middle East and the impact on inflation, will likely add to borrower caution. This reinforces the value of mortgage brokers supporting their clients through changing market conditions."
Interest rates emerged as the top factor behind brokers’ neutral sentiment, up from third place in the August 2025 survey. Cost-of-living pressures remained the biggest drag on confidence, while tight housing supply was the third most common concern weighing on borrowers. On the positive side, borrowers’ equity position, job security and savings buffers were the key factors underpinning more upbeat sentiment.
Borrower sentiment also differed markedly by state. Western Australia posted the highest level of negative sentiment, amid mounting concern over housing supply and availability, while Queensland borrowers were the most upbeat, buoyed by stronger equity positions and solid employment conditions.
