More than one million Australians refinanced their home loan over the past 12 months, saving an estimated $1,524 per year on average, according to the PEXA Refinancer Sentiment Research Report, published by PEXA Insights.
The analysis revealed that Australians who refinance their mortgage to a new lender save an estimated $1,908 per annum on average, compared to an estimated average saving of $384 per annum for homeowners that refinanced with their existing lender.
Record home loan refinancing activity has been observed in the first quarter of FY23, with PEXA’s Refinance Index reaching 201.1 in the week ending 4 September.
And there are no signs of this trend slowing, with the PEXA Refinancer Sentiment Research Report finding that almost 2.3 million Australians were considering refinancing in the next two years.
There are currently nearly eight million Australian mortgage holders, and analysis from the report suggests 31.2% of mortgage holders are in the ‘refinancing mindset’. Of note, 81% of those who recently refinanced expected to refinance again within the next two years.
Although the PEXA Refinancer Sentiment Research Report (with research conducted throughout May and June 2022) suggests there are considerably more savings to be made by switching lenders, 55% of recent refinancers stayed with their existing lender when refinancing.
The research found that homeowners refinanced their home loan on average an estimated 5.6 years after purchasing the property.
The top three reasons for refinancing were:
1. Wanting a more competitive interest rate
2. Needing to save money
3. Broker recommendations
The top three barriers to refinancing were:
1. Interest rate instability
2. The onerous application process
3. Current lender providing a competitive rate
Head of Research, Mike Gill said that “more and more Australian consumers are hunting out the most competitive interest rates, leading to record high levels of refinancing. This momentum is set to continue, as mortgage holders are investing on average six weeks into researching options that best suit their circumstances.
“Our consumer research confirms there is a level of uncertainty felt by mortgage holders, with an estimated 71% feeling anxious about the prospect of rising interest rates, 49% worried about their job/financial security, and 73% are regularly reviewing their interest rate against market trends.”
The estimated average value of properties being refinanced was $732,000, and in most cases it was the refinancer’s primary residence. On average, refinancers had approximately $491,000 remaining
on their home loan, with an estimated average of 34% of the household income being spent on mortgage repayments.
The research contained within the PEXA Refinancer Sentiment Research Report was undertaken by Nature Research, commissioned by PEXA Insights, with the aim to provide new insight into Australian property owners’ attitudes and behaviours regarding refinancing their home loan.
PEXA, the fintech behind the world’s first digital property exchange process, has recently completed the UK’s first ever digitally enabled remortgage transaction, in an important milestone in its mission to streamline the property remortgage and completion process.
Hinckley & Rugby Building Society was the first UK lender to complete a remortgage using PEXA’s entirely new digital exchange and payment system, and the conveyancing was undertaken by national law firm Muve.
The transaction leveraged PEXA’s newly developed exchange platform and payment scheme, PEXA Pay, to
expedite what has historically been a technical and laborious completion process, in minutes, rather than days. Using the new technology, Hinckley & Rugby Building Society and Muve could orchestrate financial settlement directly from the incoming lender’s (RT) account, and could seamlessly collaborate to lodge the application for registration with HM Land Registry.
PEXA Pay is the seventh active payment system in the UK, and has
the Bank of England acting as the settlement service provider. Following the successful transaction, PEXA will soon be onboarding Shawbrook Bank as an additional partner. Further lenders and conveyancers are due to be announced throughout 2023. PEXA’s system has been designed to transform the remortgage process to improve customer outcomes, and improve capacity in the conveyancing market. PEXA’s recent research showed that as many as one in five (20%) mortgage borrowers looking to remortgage in the past two years have found the process so difficult or complex they abandoned it altogether. Improving this process is critical in a market where interest rates are rising, and financial outcomes for consumers will be significantly impacted by a constrained ability to remortgage quickly. PEXA’s new centrally connected platform reduces the associated time, risk and costs in the remortgage process for consumers, lenders and conveyancers alike.
Building on the successful development and implementation of its remortgage platform, PEXA aims to broaden its focus to deliver a transformed sale and purchase process in 2024. The company’s expansion into the UK market follows its success in Australia, where it has facilitated over 13 million property transactions worth circa AUD $2 trillion.
James Bawa, PEXA UK Chief Executive Officer, said “our mission is to transform the property market for consumers, lenders and conveyancers. The completion of the UK’s first digitised remortgage transaction marks a major milestone in this journey, and acts as a tangible proof of concept for the wider industry.
“The successful launch of our new platform is a testament to the openness to innovation and collaboration we have seen from the Government, Bank of England and the wider lending and conveyancing industry in the UK. Not least, Hinckley & Rugby Building Society, which has provided early and consistent support, and is now the first to benefit from our platform.
“This is just the start. We have invested significantly into the UK to develop and embed our technology to help drastically improve the remortgage process. We know from the Australian experience just how significant and widespread this transformation can be. We will continue to invest and work with industry to roll out our platform more widely, so that we can help bring about better consumer outcomes, making a stressful and delayed remortgage process a thing of the past.”
Colin Fyfe, Chief Executive Officer, Hinckley & Rugby Building Society, explained that “we are always keen to work in collaboration with key partners who are digitally focused and forwardthinking, to create a modernised and more efficient way of working. PEXA’s proposition of a streamlined, digitised mortgaging process provided the perfect opportunity for us to extend our own internal capability and expertise, to help deliver the pioneering property exchange platform to the UK, following its huge success in the Australian market.
“Our staff have been working closely with PEXA on the design, testing and implementation of the PEXA platform and it has been a privilege to be the first UK lender to undertake a PEXA transaction and to settle the remortgage funds via the new PEXA Pay scheme. We will continue to invest in supporting PEXA on their journey
and to deliver the best possible service for our customers and our staff.”
David Jabbari, CEO, Muve, added “we are delighted to be partnering with PEXA at the very start of their journey into the UK market. The PEXA
platform has the technological and financial sophistication to change how conveyancing transactions are settled in the UK. We are very proud to have worked with the Hinckley & Rugby Building Society on the first transaction and look forward to many more.”
PEXA recently hosted its first ever pride event – the latest milestone on our D&I journey.
The event brought businesses, government and NFPs together for an important discussion about the state of LGBTQI+ inclusion and equality in Australia, as well as an exploration of the role leaders and organisations within our network have in advancing inclusion and equality.
We were privileged to have Ben Allen, Partner at Dentons, Head of Diversity and Inclusion for Dentons in Australia and Partner Sponsor of Dentons’ LGBTQI+ network GLOW, moderate an insightful Q&A session among attendees.
We spoke to Ben about his own D&I journey and the steps corporate organisations can take to be more inclusive, as well as his experience at the PEXA pride event.
“Being asked to help facilitate an audience discussion following Anna Brown’s excellent keynote address was a real honour,” said Ben.
“The discussion focussed on where different organisations are on their
inclusion journey, and it was great to be in a room of like-minded professionals who were able to share their insights and thoughts openly.”
Reflecting on his own D&I journey, Ben said that “having openly identified as gay for most of my professional career, it has been encouraging for me to see how my identity has not hindered my career progression and in fact has given me greater empathy for those within the profession who are from diverse backgrounds and minority or underrepresented groups.
“I am a proud member of the LGBTQI+ community.”
Ben lamented that while this wasn’t always the case during his legal career, helping in the fight for marriage equality in Australia in 2017 through Dentons’ LGBTQI+ network, GLOW, opened his eyes to the importance of inclusion in the workplace, being a visible role model for others in his identity and the importance of representation.
“Achieving marriage equality in Australia was a huge win for the LGBTQI+ community, however it
opened my eyes to the fact that there are many areas of discrimination and reform still to be tackled, for not just that community but for all of those marginalised groups who lack representation.
“The importance of securing rights for those in the trans and gender diverse community remains a divisive issue in Australia, and one about which I am passionate. None of us are equal until we are all equal –and the fight continues, and the work that Dentons is doing by running the Trans and Gender Legal Service is one of my proudest professional achievements.”
Research by the Diversity Council
Australia1 shows that Australian workers overwhelmingly support inclusion initiatives. In 2021, as in 2017 and 2019, three out of four Australian workers supported or strongly supported their organisation taking action to create a workplace that is diverse and inclusive (D&I) and only 3% of Australian workers opposed or strongly opposed their organisation taking action.
So while there are many corporates like Dentons that are leading the way when it comes to implementing policies and taking action in the D&I space, and despite the fact this progress is evidently well supported by Australians across all sectors, there is clearly still significant progress to be made.
We asked Ben what his advice would be to corporates who want to foster a more diverse and inclusive workplace.
“Corporates need to stand up and be held accountable for their stated position on inclusion and diversity. We hear about the term “greenwashing” at present, where organisations overstate their environmental credentials, and the same can happen in the inclusion space.
“Being inclusive means ‘walking the talk’ and actually committing to real steps that foster greater inclusion of all underrepresented members of an organisation.”
Ben added that “this also means being public about why inclusion matters, and giving back – financially or in kind – to organisations in the community who need assistance.
When asked why events like the PEXA pride event are important, Ben stated that we need to continually remind those within organisations that the journey to true inclusion is far from over.
“While many strides have been made, there will be a role for discussions like this for many years to come.”
Since its advent, employees have been seeking greater support and flexibility – while undoubtedly now having proved their ability to deliver BAU results while working remotely.
A Global Work-from-Home Experience survey in 2020 showed that 68% of employees felt that they were very successful working from home. Respondents felt that solo or group work were performed equally well, with collaboration preferred in person.
As the world begins to return to normal, employers have started to explore how they can offer that ongoing flexibility, while also seeking to return their workforce to the workplace.
With inflation and the rising cost of living, there are factors which may lead to the balance of power shifting to the employer – with the potential for strengthening of return-to-workplace practices.
Nevertheless, this ongoing negotiation between employees and employers continue to play out with the goal being a win-win for all parties. The benefits of providing a flourishing environment for employees can be seen in the net effect of positive results for customers, shareholders and wider industry.
In Australia, while the proportion of workers switching jobs are still relatively low (at 9.5% in the February mobility survey by the Bureau of Statistics), we have had the highest switching rate since 2012. And with more job vacancies than ever before in Australia, it may be likely that a high volume of employees will be tempted to switch jobs soon.
The demand for flexibility has been building up for decades with one of the major holdbacks being trust – but the forced working from home implementation brought on by the pandemic proved that in the end, strong results are the main determining factor.
Leading organisations are learning to amalgamate the best of their
There is no doubt that the COVID-19 pandemic has fundamentally changed the way we work.
culture with the flexibility craved by employees, to be supportive and improve employees’ work life balance, keeping them motivated, engaged and informed to get the best outcomes both for their people and the company.
We spoke to Sabina Sopov, Chief People Officer, PEXA after the leading prop-tech secured the 2022 Australian HR Awards, Employer of Choice (100-999 employees) win, on adapting the workplace for the future with their Flex First Policy.
“Getting that balance right was important for us at PEXA. Our peoples’ flexibility and welfare were a priority when we developed our Flex First policy, introduced earlier this year,” Sabina shared.
“PEXA’s Flex First policy was developed based on feedback from working groups held at the end of 2021, after nearly two years of working remotely. Designed to combine the needs of the team, individuals and leaders, while continuing the great service we provide to our customers – our people determine where they work each day, based on what works for them and their teams. To bring people together, we hold regular companywide events, consciously creating purpose driven moments as opportunities for people to connect, celebrate, learn and collaborate. In addition, PEXA offers up to 12 weeks of ‘workcation’ where our people have the option to extend their personal travel time and work remotely.”
Sabina adds, “Feedback has been incredibly positive – our people find that they are able to strike better work-
life balance, and spend quality time with their families while still maintaining the interaction with their colleagues.”
These policies compliment other benefits such as the four Wellness Days per annum, exceptional family benefits for primary and secondary carers, and a dedication to learning with the launch of the PEXA Academy.
“And we will continue to evolve our Flex First policy, trialling different frameworks to enhance and improve – balancing the needs of individuals and our company goals. Our focus will always be on our people – how we can set up the best working experience so we can get the best outcomes for them, their teams and our organisation.
“It’s important to find the right technologies to support a hybrid workplace, and equip our people with the tools to do their job, no matter where they are. We’re passionate about innovation and are constantly testing new solutions, also ensuring that the right cyber security controls are place so we aren’t introducing new risks to the organisation. We are also due to commence a complete refurbishment of our Melbourne headquarters to support our Flex First policy.”
While the paradigm shift on the workplace of the future continues, it’s evident that there will be a greater focus on employees’ mental health and wellbeing. And flexibility must be supported with the right technologies so both the organisation and the people within can continue to be creative, responsive and thrive.
Do you have feedback, a question or a story pitch? Get in touch with us at industry@pexa.com.auS
CO M M UNICATIO N GUA R A NTEE*