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Data from Equifax’s Consumer Market Pulse found that refinance inquiries accounted for a third of total mortgage demand in February, and brokers have said that the Reserve Bank’s decision to hike rates will only push that trend.
On Wednesday (18 March), the Reserve Bank of Australia (RBA) delivered its second consecutive 25-basis-point hike, taking the cash rate to 4.1 per cent, with all four major banks forecasting a further increase at the next meeting.
Most lenders have also begun outlining when higher rates will be passed through to borrowers.
Timing the switch
The rate hikes have not translated to a slowing down in the housing market. Rather, borrowers are moving fast.
Equifax data showed mortgage activity continued to underpin credit demand in February, with total inquiries rising 8.9 per cent year on year. Year-to-date volumes were also elevated, up 7.3 per cent, pointing to a rush of activity as conditions change.
Refinancing remained a significant component of this demand, accounting for 34 per cent of all mortgage inquiries during the month. Within this, lenders appear to be retaining a larger share of existing customers, with applications for refinance upgrades with current lenders increasing 15.2 per cent.
At the same time, competition in the switching market intensified, with large non-bank lenders recording 44 per cent year-on-year growth in refinancing activity.
“This reflects a fairly resilient Australian consumer navigating what is a complex economic environment,” Equifax’s chief solutions officer, Kevin James, said.
“The movement in the rate environment early this year has likely been a trigger for consumers to lock in credit and refinancing arrangements now to get ahead of any future rate increases.”
Sydney mortgage broker and founder of Its Simple Finance, Joseph Daoud, told Broker Daily that timing is quickly becoming the defining factor for borrowers considering a switch.
“If refinancing is on your radar, timing is becoming critical. Many borrowers are reviewing their options now rather than in a few months’ time, when rate movements and changing lender policies could mean fewer opportunities and less flexibility,” Daoud said.
Ajar Rajbhandari, mortgage broker at Home Loan Experts, said many borrowers are already behind the curve as lenders continue to adjust pricing outside of RBA moves.
“Refinancers are seeing urgency. Many borrowers who benefited from the cuts in early to mid-2025 haven’t reviewed their rate since. With lenders repricing independently of the RBA, there’s a growing gap between competitive rates and what some borrowers are sitting on,” Rajbhandari said.
“That gap is costing them.”
From rate savings to cash flow management
Brokers say the purpose of refinancing is also evolving as cost pressures build.
Rebecca Jarrett-Dalton, mortgage broker and founder of Two Red Shoes, said conversations are no longer centred purely on chasing lower rates.
“Refinancing is shifting from a ‘saving’ conversation to a ‘cash flow’ conversation. While we only recommend moving if it genuinely saves the client money, we are now seeing more people look at refinancing to fix or extend their loan terms,” Jarrett-Dalton said.
“It’s not mathematically ideal because you pay more over the life of the loan, but when your back is against the wall, stretching the term is a valid tool to breathe some life back into the household budget.”
However, she warned that regulatory settings are starting to constrain options.
“With the 3 per cent serviceability buffer still in place, the window to switch is closing for many. If you wait too long, you might find yourself ‘locked in’ to your current lender,” Jarrett-Dalton said.
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