While refinancing is on the rise, many consumers are failing to see benefits from it, the MFAA has claimed.

The MFAA Home Finance Index has shown 30.9% of respondents refinanced their mortgage in the past 12 months. However, only 52.9% said they had seen benefits from refinancing.

MFAA CEO Phil Naylor has warned that churn created by the removal of exit fees could see consumers wooed into refinancing deals that will not prove beneficial.

"Simply refinancing doesn't always achieve the desired goal, and switching for a better rate may not be as important as the terms of the loan," he commented.

As competition between lenders heats up, Naylor said, consumers may be targeted to their detriment.

"With a ban on exit fees, the mortgage holder is seen as a potential switcher by the lenders, and that means borrowers are being swamped by extensive promotional advertising," he commented.

The role of brokers in this environment will be to provide borrowers with insight amidst lender pressure to refinance, Naylor indicated.

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