A Change Of Habit
The Age
Wednesday May 21, 2003
The borrowing habits of Victorians are undergoing a radical change. While home loan approvals for the first quarter of this year are up again on the equivalent period for 2002, there's a major shift in the reason for seeking loans.
Refinancing is now propelling the home loans market scene.
In fact, according to the Australian Bureau of Statistics, the number of Victorians refinancing is up a huge 41 per cent and the reason is increasingly loan-wise consumers who have a greater understanding of debt consolidation and how to use the equity in their homes to fund property growth and investments, personal loans and renovations.
While the Reserve Bank has been warning of the dangers of the huge increase in borrowings, consumers seem to have made up their mind.
Five years ago, consumers held onto home loans for an average of seven years, but loans are currently being renegotiated every 3.8 years.
"The advantage of refinancing is to either obtain extra capital to improve one's lifestyle, or to convert multiple debts into one single loan," says Warren O'Rourke, spokesperson for mortgage broker Mortgage Choice.
"This can be paid off monthly, usually at a lower rate of interest (and) in one affordable payment."
The company says its latest statewide survey has revealed the growing involvement of women in home loans with initial Victorian borrower inquiries coming primarily from females.
"Men used to (make) most of the financial decisions, but over the past few years this has been changing," Mortgage Choice's state manager Debbie George says.
She says women now have more financial savvy and a growing confidence to make their own inquiries.
Not surprisingly, her comments are in line with reports of a similar trend across Australia.
© 2003 The Age
Share This