ABS noted that there is anecdotal feedback that this increase was driven by a portion of refinancing applications lodged before lenders ended cashback offers on 30 June.

In an episode of Savings Tip Jar Podcast in May, Brodie Haupt – CEO and co-founder of non-bank lender WLTH – said cashback offers distorted the mortgage market.

“What we see is the major banks failing to understand the cost of acquisition for a customer and have become quite lazy — rather than trying to invest in education to their borrowers and customers, they’ve got to look for retention, rather than innovating,” he said.

Loan commitments down in July

While refinancing remained elevated, the overall housing lending went down, driven by the 1.9% drop in the value of new owner-occupier financing to $15.6bn.

The investor segment also posted a decline, with the value of loan commitments falling 0.1% to $8.6bn.

Interestingly, the value of new investor loan commitments in Queensland increased, up 6.8% to $1.9bn in July.

While the Northern Territory posted a higher increase at 34.4%, ABS noted that the pool of data in the territory is smaller and more volatile.

Personal loan commitments rise

The recent ABS data also showed an increase in personal loan commitments in July.

Over the month, the value of new fixed-term personal financing rose 4.7% to $2.3bn, driven by the 42.1% increase in the personal investment segment.

Meanwhile, financing for travel and holidays also rose — this segment reached the highest level since August 2018 after posting a 12.3% growth to $57 million.

Full Article: InfoChoice