It seems like major banks are winning refinancers back amid the COVID-19 pandemic, a study by PEXA shows.

The total refinancing activity went up by 27% during the first nine months of the year compared to the same period last year. According to the study, the surge in refinancing could be due to a combination of mortgage stress and borrowers shopping around amid the low-rate environment.

The study was based on the data from 20,000 property transactions settled on PEXA's digital platform. While the property settlement volume went into the negative territory during the lockdowns in May and June, refinancing activity helped spur recovery.

One interesting highlight of the study is the shift in the preference of borrowers when it comes to refinancing. The study found that major banks have started to outperform non-major lenders in terms of new mortgages and refinances. In fact, majors entered a "net win" refinancing position in May, and started outpacing non-majors in terms of refinancing the following month.

"The non-majors had been steadily chipping away at the majors’ refinancing share for at least two years but that was lost with the advent of COVID-19. As is the case for new mortgages, the majors’ growth in refinancing share may be attributable to competitive offerings and responsiveness to market conditions throughout 2020," the study said.

However, the study said in the medium term, house prices and new loan commitments are likely to moderate further.

"Even after recovery in the key drivers of housing activity, there is likely to be a lag before any increases in property values and sales emerge," it said.