Mortgage holders continue to refinance their loans at near-record levels as expiring low interest loans drive a hunt for the best possible deals. With the Reserve Bank of Australia board pondering on Tuesday whether or not to hike rates for a 13th time in this tightening cycle, official figures show the total value of refinancing fell 3.1 per cent in June but at $20.2 billion was close to the record high $21.1 billion reached in March. In a sign that new borrowers think the peak of interest rates may be close, the Australian Bureau of Statistics report showed the value of variable rate loans taken out in June was close to an all-time high of $50.5 billion while those opting for a fixed rate loan were less than a tenth of that. Overall, borrowing for housing fell 1 per cent and the value of new personal loans dropped almost 7 per cent reflecting, in part, a continued slide in building approvals, which declined 7.7 per cent in June to be down 18 per cent from a year earlier. Treasurer Jim Chalmers acknowledged that people were "under the pump" from rising inflation and interest rates. "Australians are under the pump and higher interest rates have been part of that," Dr Chalmers said. "People are having to make difficult decisions about their household finances. We understand that." The treasurer said about 19 per cent of those with a fixed mortgage had their fixed term expire in the June quarter and a further 17 per cent would face the same circumstance this quarter. Such borrowers can face a 3 percentage point jump in repayments. "When people come off fixed on to variable when interest rates have been going up since before the election, obviously that puts extra pressure on them," Dr Chalmers said, adding that the government's "number one priority is taking the edge off some of these cost-of-living pressures without adding to inflation". But the sustained weakness in building approvals, which have been in decline for more than two years and dropped to just 13,808 dwelling in June, underlines concerns that country is making little headway in tackling one of the key drivers of inflation, rising rents. The number of building approvals is falling well short of what is estimated is needed to meet existing demand and make a dent in long waiting lists for social and affordable housing. The government's signature housing policy, the Housing Australia Future Fund, remains stuck in the Senate in the face of opposition from the Coalition and the Greens. READ MORE: Opposition Senate leader Simon Birmingham criticised the proposed fund as a "terrible policy". "It's not going to do a single thing to help with home ownership. It's certainly not going to fix the current slump in terms of dwelling approvals that we're seeing," Senator Birmingham said. The Greens, meanwhile, are calling on the government to invest $2.5 billion a year on public and affordable housing and provide incentives for state and territory governments to implement a two-year rent freeze and ongoing rent caps. But Dr Chalmers accused the Greens of being more interest in fighting Labor than helping vulnerable people in need of social and affordable housing. "It's time to end the ambit claims and the political games that the Greens party is playing in the Senate over housing," he said. "If they really want to build more homes for people who desperately need homes, then they'll vote for [the Fund] in the Senate". Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
