ABA CEO Simon Birmingham interview on ABC Sydney Drive with Thomas Oriti

E&OE
Radio Interview
Interview on ABC Sydney Drive
21 September 2026

Topics: Refinancing and competition in the home loan market; Hardship support

Thomas Oriti: Now, have you had to refinance your mortgage, perhaps because of rising interest rates, or maybe something else? Maybe your work situation changed, and you weren’t bringing in as much money. What was that process like? Did the bank allow you to refinance without too much trouble, or was it very difficult to get that through? Did they knock you back, perhaps? 1300 22 702. What can you share about the experience? It might be helpful for others, and we’d love to hear from you. We do often hear that banks have financial hardship provisions, for example, in the event that your circumstances change and you can’t service the loan. And I ask all this because there is the looming, in fact, increasingly likely, possibility of another rate increase next week. So we wanted to chat about that now. What’s available to you from the banks if you’re struggling with your loan? Simon Birmingham is with us, the CEO of the Australian Banking Association. Simon, welcome back to the program. Good afternoon.

Simon Birmingham: Hello, Thomas. It’s good to be with you again.

Thomas Oriti: Thanks for joining us. Are you noticing an increase in refinancing requests this year, as a matter of interest?

Simon Birmingham: I haven’t seen any data that would suggest there’s an increase this year, but over recent years, we have actually seen growth in the extent of refinancing, and that’s reflective of a very competitive home loan market. Last financial year, we know that some 661 000 mortgage loans across Australia were refinanced, and that’s the highest on record. That really was customers choosing to vote with their feet in favour of their bank balances by shifting to a lender offering more favourable terms according to those customers. Obviously, there may be some in that category who were doing so because of any particular pressures. But we certainly know from the research that the vast majority were taking the opportunity to seize a better deal as they could find one in the mortgage market.

Thomas Oriti: Okay, so it does sound like a growing number of people are canvassing that possibility based on that data. Can you understand why they might be doing that?

Simon Birmingham: Well, indeed, but they’re doing it in some ways because of banks out there advertising and promoting the fact that they have better deals, that they are willing to better their competitors’ deals, that these are opportunities for people to save. In fact, we know from those who have refinanced that, on average, they’re saving $2000 to $3000 annually by having negotiated a better rate or by finding something that suits their circumstances in a way that enables them to get ahead a little bit more.

Thomas Oriti: But will a bank always consider a refinancing request? Do they have to consider it?

Simon Birmingham: Banks don’t have to consider in the context of, we don’t all just get to ring up and demand a lower interest rate. People can try, of course, but banks absolutely have obligations to consider hardship circumstances. Any customer who is in a hardship circumstance has rights to speak to their bank, and they have quite experienced and specialised teams nowadays who can work through what some of the options may be for customers in those hardship circumstances.

Thomas Oriti: Simon Birmingham is with us, the CEO of the Australian Banking Association. You might have a question or a story to share about going through the refinancing process. I’d love to hear from you: 1300 22 702, and the text lines open as well, 0467 922 702. It’s a quarter to six. Simon, what does the process involve? Obviously, you’ve got to explain how your circumstances have changed, right? What sort of hoops do you have to jump through to be able to even be considered for refinancing?

Simon Birmingham: All of us are in very different circumstances, and I think recognising that we were talking about refinancing and those figures I gave at the outset, that’s people often in good financial circumstances simply seeking a better deal, as distinct from people in hardship circumstances who are actually needing assistance. In those cases, as said, people have a right to speak to and contact their bank. The ABA website has contact points for anybody in those hardship circumstances to find the hardship communication point links for different banks and to get in touch with their them. They should contact their bank; they’re the ones who are relevant. Obviously, yes, they’ll need to go through what their circumstances are. But if you’re banking largely with one provider, they’ll be able to have much of that data and information available. Then there are a number of different options, which could involve moving to interest-only payments for a period of time, restructuring the length of the loan, or possibly providing some flexible access to term deposits or other products or support that may assist or support cash flow, or possibly a temporary deferral of payments that may occur if people have just lost their job or are in circumstances that need relief for a short period of time.

Thomas Oriti: As you say, Simon, a lot of people are either pursuing this option or considering it at the moment. They might be going through mortgage stress. I feel like we should point out one important thing: refinancing is not free, is it? You’ll often face exit or discharge fees from your current lender, and then there’ll be application, settlement, and registration fees from the new one. If you’re breaking a fixed-rate loan early, you can face some pretty hefty break costs as well. This doesn’t necessarily become a cheap option, does it?

Simon Birmingham: Well, again, Thomas, separating the two different categories. If you’re in a position where you’re just looking for a better deal, obviously you should weigh up the totality of the circumstances. If you’re getting a better deal, does that outweigh any of the other costs that you might face by switching? Overwhelmingly, those 660 000 people who changed last year weren’t changing to pay more; they were changing to pay less. But if you are in hardship circumstances, then it’s not about refinancing your mortgage as much as it is about talking to the bank that provided that mortgage about new terms on that mortgage. Those new terms, as I said, can involve different changes to repayment terms, timelines, etc., and negotiating those with your bank which in those hardship circumstances, you don’t face the same types of fees or charges that you were talking about before. For those who are competing for better deals in the home loan market, well, they are usually part of what we know are 85% of Australian households who are actually still ahead on their mortgage repayments. So the vast majority are in front, and increasing numbers of those over recent years are taking advantage of competition in the banking sector to shop around and try to find a better deal.

Thomas Oriti: I guess the point I make about the upfront costs is that it’s not a decision to be taken lightly. For example, when you’re switching lenders, some people might think it’s easy to reset your mortgage. You’ve got a brand new 30-year term, and with that, you get lower monthly repayments. But that repayment timeline means you could be paying interest for much, much longer. It could increase the total lifetime cost of your home. So, you’ve got to do your homework before you go down that path, right?

Simon Birmingham: Yeah, totally. People absolutely should make sure that they are weighing all of the costs – the transfer costs, the ongoing costs – when they are making those comparisons. Of course, we still see very large numbers of Australia’s mortgages written by brokers as well. So, if you are using a broker, as distinct from talking to the bank yourself, make sure that you are seeking all of that information and getting them to help you do an apples-for-apples comparison of where you are.

Thomas Oriti: Simon Birmingham is with us, CEO of the Australian Banking Association, 10 to five on 702 ABC Sydney. The number to call is 1300 22 702. Getting some concerns here. Yeah, this is interesting, Simon. On the text line, I’ve heard some people say they don’t want to risk talking to their bank about refinancing because they’re worried it’ll mean they’re on the bank’s radar, or they might be more closely monitored. I don’t know what they’re trying to hide, but is that a legitimate concern?

Simon Birmingham: No, the worst thing somebody can do if they are facing financial pressures and hardship is delay, because usually those pressures will only compound. Once they’ve compounded, the options available to the bank to help them can potentially narrow. The earlier the conversations are had, the easier it may be to look, of course, at some things that may not be about restructuring a mortgage, but about helping to shift credit card debt that might have gotten out of control into a repayment plan that is much more manageable and doesn’t compound for individuals. Getting in touch early is what every single bank will advise and encourage, and they do that because it is about trying to help a customer in ways that help the customer, but of course ultimately help banks too. I think that is one of the things that banks have learnt over the years, particularly from some of the stories out of the Royal Commission, that it is far better to help a customer stabilise their finances and ultimately see them keep their home or work through circumstances in a planned and managed way than to face a crisis point that is shocking and terrible for the customer, can be reputationally damaging for the bank, and can also see the bank lose money out of that customer and those transactions, rather than having helped them earlier and stabilised the circumstances if possible.

Thomas Oriti: It’s tricky at the moment, though, isn’t it? Because valuations are a bit fluid, aren’t they? Property prices are falling in some areas more than others. In Sydney, it’s a bit of a mess, right? Is that affecting how a bank can put a value on a property at all in order to allow for something like refinancing? I wonder if refinancing is harder now because of the fluctuations that we’re seeing in property values.

Simon Birmingham: I think it will be interesting in a year’s time to see comparative data of like-for-like periods and what has happened. The residential mortgage market remains intensely competitive, and of course with the data clearly showing that fewer investors are in the market, and at least at present, a bit of a dip in first home buyers in the market, that’s only going to increase hunger between the banks to compete for other customers. They have to then weigh that against responsible lending criteria, particularly somebody’s ability to service a loan. Now, the value of the property doesn’t really go into the servicing, but the value is of course relevant to the equity position. Most Australians, even with the changes we’ve seen in the housing market this year, most Australians, the overwhelming majority with a mortgage are firmly in positive equity and strongly positive equity positions. As I said before, we’ve got some 85 per cent of households who are ahead of their repayments, and around one in three are more than two years ahead of their repayments with their bank. That puts them in a strong position with their existing bank, but also likely a strong position if they were to be shopping around and trying to refinance with another bank for a better deal.

Thomas Oriti: Just briefly, with that stronger position they have with their existing bank – and we’re looking at potentially another interest rate rise soon, particularly if you’re on a variable rate – should people be approaching their current bank and saying, “I want a lower interest rate”?

Simon Birmingham: Look, that is obviously an option for individuals, and people are free to try to go and have those conversations with their banks. There is a limit which needs to be stressed, and clearly, people also look to make sure that with higher interest rates, if that is what occurs, deposit rates go up at the same time. We’ve already seen some of the term deposit rates increasing in anticipation of that interest rate increase. So, there are no guarantees. If you’re in a good, strong position, shop around, absolutely. Have a conversation with your own bank, absolutely. But equally, take on board the wise advice you’ve emphasised, and that is to make sure you’re comparing all of the different factors at play and achieving the right deal for your circumstances.

Thomas Oriti: We appreciate you coming on as always. Thank you very much.

Simon Birmingham: Thanks, Thomas. My pleasure.

Thomas Oriti: Good on you. Cheers. Simon Birmingham there, CEO of the Australian Banking Association, joining us there about the options to consider and the risks to consider if you’re planning on going down that path of refinancing your mortgage.

Ends

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