Mortgage refinancing activity up as survey shows borrowers are fudging the numbers

Owner-occupiers are refinancing in record numbers according to new data from the Australian Bureau of Statistics, as separate figures from Finder show that more than 10 per cent of borrowers lied about details on their mortgage application.

According to the latest ABS lending update, $13.4 billion worth of owner-occupier mortgages were refinanced in November, the largest figure on record.

It comes as thousands of borrowers who took out a fixed rate loan at an ultra-low rate during the early stages of the pandemic are forced to transition to a higher variable rate as their fixed period comes to an end.

All up there was a 9.1 per cent increase in refinancing activity, according to the ABS.

“More borrowers switched lenders for lower interest rates as the RBA’s cash rate target continued to rise,” Dane Mead, acting ABS Head of Finance and Wealth, said.

Despite the record refinancing activity, lending to new borrowers was down in November.

New owner-occupier loan commitments fell 3.8 per cent in November, while new investor loan commitments fell 3.6 per cent.

“The number of owner-occupier dwelling commitments also continued to fall in November to below the pre-pandemic level for the first time,” Mr Mead said.

A dramatic dip in the number of first-home buyers taking out a loan (down 5.5 per cent in November) was a key reason for the subdued lending figures.

Lending to first-time buyers was 51 per cent below its January 2021 peak and 16 per cent below the February 2020 pre-pandemic level, according to the ABS.

One in eight owners lied on their loan application

Separate figures released by Finder this week could be an indication that some borrowers are less well-equipped to deal with future rate rises than banks thought when approving their application.

Of the 310 mortgage holders who answered the Finder survey, 13 per cent admitted they had provided false details on their application.

If that sample is representative of all mortgage holders then 429,000 borrowers may have falsified their applications, Finder reported.

Four per cent of respondents admitted to lying about their income on their mortgage application.

A further four per cent owned up to lying about the level of debt they were carrying prior to taking out a mortgage.

Borrowers who lied on their application could be setting themselves up for future financial issues, Richard Whitten, Home Loans Expert at Finder, said.

“While the lies might never come to light – your ability to afford the loan could create a lot of financial stress,” Mr Whitten said.

Lying on an application could also raise issues concerning fraud.

“While small inaccuracies may not be the end of the world, if a lender finds a big discrepancy in the figures you’ve given them or you’ve outright lied about your financial position, the consequences could be severe,” Mr Whitten said.

“Home loan contracts typically contain wording around providing misleading or incorrect information to a lender. In the worst case, lying on a mortgage application is grounds for a default event, meaning the lender could sell your property.

“And legality aside, you’re putting yourself in a riskier position if you lie on your application and borrow more than you can afford.”

Show More

Jack Needham

Jack Needham is the Digital Editor at Elite Agent

News Room

If you have any news for the Real Estate industry - whether you are a professional or a supplier to the industry, please email us: