New MFAA data shows refinancing barriers have doubled, but brokers are still cutting deals for clients under pressure
A survey of 588 Australian mortgage brokers has found refinancing barriers are back on the rise. Nearly half reported more clients unable to switch loans due to serviceability requirements, reversing a two-year improvement trend.
The Mortgage and Finance Association of Australia (MFAA)'s August 2026 Market Sentiment Survey put the figure at 49.2%. That is nearly twice 24.4% recorded in the prior survey six months earlier.
The proportion of brokers flagging greater refinancing difficulty had dropped from 83% in February 2024 to 42% by February 2025. Conditions eased further through August 2025.
"After two years of improving refinancing conditions, we have seen a reversal, with the proportion of mortgage brokers reporting more clients unable to refinance doubling in six months," said MFAA chief executive Anja Pannek (pictured).
Why are refinancing barriers rising again?
The data points to the 3% serviceability buffer as the central sticking point. The Australian Prudential Regulation Authority (APRA) requires lenders to assess borrowers at a rate three percentage points above what they will actually pay. The measure is designed to protect against future rate rises.
The MFAA has pressed for greater flexibility in how the buffer is applied. The case is strongest for borrowers with a clean repayment record who are seeking a more competitive loan.
"Responsible lending must remain at the centre of our system. At the same time, borrowers who have consistently met their repayments should not be unnecessarily prevented from moving to a more affordable or suitable home loan," Pannek said.
"The findings reinforce the importance of lenders having appropriate exceptions processes that consider a borrower's individual circumstances and demonstrated repayment history."
The association's ongoing push for APRA to revisit the serviceability buffer's application is now backed by the sharpest single-period deterioration the survey has recorded.
What are brokers doing for clients who can't refinance?
Despite the worsening picture, the survey captures substantial broker activity on behalf of clients under pressure. In the six months to August 2026:
- 96% of brokers had helped clients secure a discount from their existing lender
- 95% had facilitated a refinance to a new lender
- 91% had helped clients restructure their home loan
- 89% had assisted clients using a mortgage broker for the first time to refinance
Borrower confidence has also deteriorated. Some 55.3% of brokers reported clients feeling negative about their financial outlook. That compares with 24.2% in the prior survey. Cost-of-living pressure was the chief driver.
Forty per cent of brokers expect more clients to struggle with repayments over the next six months.
"While the increase in negative sentiment is significant, there is also a positive story in how mortgage brokers are helping their clients respond," Pannek said.
Brokers now facilitate a record 81.6% of new residential home lending in Australia. The MFAA points to that figure as evidence of the trust borrowers place in the channel when conditions tighten.
The association said it will use the survey findings to inform ongoing discussions with lenders, regulators and government on serviceability settings and competition. For brokers navigating this environment, recent insight from lenders including CBA, Bankwest and ING on managing refinancing complexity might be helpful.
The MFAA's sustained advocacy for a more flexible approach to the serviceability buffer will continue to be informed by member data, including these latest refinancing barriers figures.
"Many borrowers may still have opportunities to reduce their repayments, even if refinancing is not immediately available. The first step is having that conversation early," Pannek said.
