Insights
Lendi Home Loan Snapshot: The pandemic effect
This Lendi Home Loan Snapshot tracks Australian borrower activity across Lendi’s panel of more than 38 Australian banks and lenders between 1 March and 31 May 2020 and compares this to pre-pandemic conditions over the 12 months to 29 February 2020.
To understand what is happening in the market now, loan applications submitted for approval have been analysed. The sample consisted of more than 12,500 loan applications submitted.
Changing borrower preferences - lender type
Borrower preferences shifted to favour the big four lenders, with refinancers leading the trend.
| % of borrowers choosing a big four lender | 1 March 2019 to 29 Feb 2020 | 3 months to end May 2020 |
|---|---|---|
| ALL loan applications | 16% | 38% |
| Refinance | 14% | 48% |
| New Purchase | 16% | 21% |
| Owner Occupier | 15% | 36% |
| Investor | 17% | 47% |
| % of refi borrowers choosing a big four lender | 1 March 2019 to 29 Feb 2020 | 3 months to end May 2020 |
|---|---|---|
| Refinance /Owner Occupier | 13% | 46% |
| Refinance/Investor | 16% | 53% |
Changing borrower preferences - fixed rates
With fixed rates falling to new lows, there was notable growth in borrowers opting to fix rates over the three months to the end of May, when compared to the 12 months prior to the pandemic.
| % of borrowers choosing fixed rates | 1 March 2019 to 29 Feb 2020 | 3 months to end May 2020 |
|---|---|---|
| ALL loan applications | 15% | 26% |
| Refinance | 14% | 28% |
| New Purchase | 15% | 25% |
| Owner Occupier | 14% | 24% |
| Investor | 19% | 33% |
Changing borrower preferences - fixed rates
With fixed rates falling to new lows, there was notable growth in borrowers opting to fix rates over the three months to the end of May, when compared to the 12 months prior to the pandemic.
| % of borrowers choosing fixed rates | 1 March 2019 to 29 Feb 2020 | 3 months to end May 2020 |
|---|---|---|
| ALL loan applications | 15% | 26% |
| Refinance | 14% | 28% |
| New Purchase | 15% | 25% |
| Owner Occupier | 14% | 24% |
| Investor | 19% | 33% |
Unwavering borrower preferences - repayment type
Despite the widespread economic impact of COVID-19, the proportion of borrowers selecting interest only loans remained flat during the first three months of the pandemic.
| % of borrowers choosing IO | 1 March 2019 to 29 Feb 2020 | 3 months to end May 2020 |
|---|---|---|
| ALL loan applications | 6% | 7% |
| Refinance | 8% | 8% |
| New Purchase | 4% | 2% |
| Owner Occupier | 1% | 1% |
| Investor | 25% | 27% |
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The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.
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Tags: rba cash rate, reserve bank, interest rate, refinance, new purchase
Check today's low rates
Tell us what you are looking for and see if you can save.
Check today's low rates
Tell us what you are looking for and see if you can save.
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