Refinancing activity surged in early 2025, with over 100,000 borrowers switching lenders in Q1, reaching the highest levels since September 2023. What’s driving this trend, and what does it mean for homeowners and the lending market?

Q1 2025 Refinancing Data

• ABS Lending Indicators: Number of new dwelling loan commitments fell 3.5%, but refinancing volumes are up to recent highs.

• Mortgage professionals: Nearly 100,000 homeowners refinanced in Q1—the strongest flow since late 2023.

Why Borrowers Are Jumping Ship

1. Fierce rate competition: Lenders are aggressively poaching customers.

2. Rate cuts: RBA’s February adjustments spurred borrowers to act.

3. Rising financial pressure: Although rates remain high, many are seeking ongoing savings amid mounting household stress.

Winners & Losers

• Homeowners saving: Those who timed their switch to lower rates and lower fees are winning.

• Main banks losing share: Non‑bank lenders and smaller institutions are capturing refinancing flows, pressuring majors like CBA, NAB, Westpac.

• Risks: Some borrowers may be under increasing stress as loan scrutiny tightens.

What the Data Signals

• Consistent refinancing rates, particularly during earlier high-rate periods, suggest that consumer rate sensitivity is strong.

• Non‑banks gaining momentum could redefine lender competition.

• ABS data: New owner-occupier and investor loan commitments declined, except for refinancing, which continued to rise.

Refinancing is the under‑appreciated story of 2025’s mortgage market. Cost-conscious borrowers, rate competition, and non‑bank lenders are reshaping the landscape. Brokers and banks need to move swiftly or risk losing their loyal customers.