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United States Attorney General Merrick Garland has named a special counsel to investigate the improper storage of classified documents at President Joe Biden's home and former office, an echo of a wider-ranging inquiry directed at former President Donald Trump.

The inquiry is a distraction for the Democratic president, who has criticised his Republican predecessor's handling of classified material, and could cast a shadow over Biden as both men gear up for a possible 2024 election rematch.

Garland said Robert Hur, who served as the top federal prosecutor in Maryland under Trump, will act as a quasi-independent prosecutor to determine whether classified records from Biden's time as vice president had been improperly stored at his residence in Delaware and a think tank in Washington.

Garland said Hur will examine "whether any person or entity violated the law".

The White House said some material was found in a garage at Biden's home and an adjacent room.

It pledged to co-operate with the probe.

"We are confident that a thorough review will show that these documents were inadvertently misplaced, and the President and his lawyers acted promptly upon discovery of this mistake," White House lawyer Richard Sauber said in a statement.

Asked by a reporter on Thursday about the wisdom of storing important material next to his Corvette, the self-declared "car guy" president said both were in a locked garage.

"It's not like they're sitting out in the street," he said.

"People know I take classified documents and classified material seriously."

Biden and Trump now each face inquiries from special prosecutors, who are typically appointed to politically sensitive cases to ensure a degree of independence from Justice Department leadership.

But their cases are not the same, legal experts say.

The White House said Biden's attorneys found a small number of classified documents and turned them over after discovery.

Trump resisted doing so until an August FBI search turned up about 100 classified documents, raising questions about whether Trump or his staff obstructed the investigation.

"The facts cannot be more different. The only similarity is there were classified documents that were taken out of the White House to somewhere else," National Security Counselors law firm head Kel McClanahan said.

The special counsel investigating Trump's handling of documents is also leading inquiries into the Republican's attempts to overturn his November 2020 election defeat to Biden.

As a sitting president, Biden has broad latitude to declassify documents and will likely be shielded from prosecution, as the Justice Department has a long-standing policy of not bringing criminal charges against the occupant of the Oval Office.

Trump, by contrast, lost those protections when his term ended in January 2021.

Garland said he decided a special counsel was necessary in the Biden case after an initial investigation conducted by John Lausch, a Trump appointee who serves as the top federal prosecutor in the Chicago region.

"This appointment underscores for the public the department's commitment to both independence and accountability in particularly sensitive matters, and to making decisions indisputably guided only by the facts and the law," Garland said at a news conference.

Hur, in a statement, said he would conduct the investigation impartially.

Some Republicans in Congress said they would be in a better position than the Justice Department to handle the investigation.

"When special counsels are appointed, it limits our ability to do some of the oversight investigations that we want to do," said Representative James Comer, who will head the House Oversight Committee.

Garland named a special counsel, Jack Smith, in November to oversee investigations of Trump, shortly after Trump said he would seek the Republican nomination to run again for president in 2024.

About 100 documents marked as classified were among thousands of records seized during an August search at Trump's Mar-a-Lago resort in Florida.

Biden called Trump's behaviour "totally irresponsible" in September.

Biden, 80, is expected to formally begin a re-election campaign in the coming weeks.

The White House said Biden does not know what is in the documents.

© RAW 2023

The refinancing boom continues as mortgage holders look for better deals to insulate themselves from interest rate hikes.

Refinancing levels hit $13.4 billion in November, breaking a new Australian Bureau of Statistics record for owner-occupier refinancing between lenders.

Monthly owner-occupier refinancing has remained above $12 billion since June 2022, well above pre-pandemic levels.

Acting ABS head of finance and wealth Dane Mead said rising interest rates were prompting borrowers to switch lenders.

Many borrowers are also coming off their fixed rate loans secured when interest rates were low, which is likely contributing to the uptick in refinancing.

New home loans fell 3.7 per cent for the month, continuing their fall from record high levels in the first half of 2022 .

Mr Mead said the number of owner-occupiers taking out new home loan commitments fell below pre-pandemic levels for the first time in November.

Investors are also borrowing less, with new investor housing loan commitments falling 3.6 per cent over the month.

Higher interest rates are limiting the amount buyers can borrow, with Canstar analysis showing borrowing power has fallen by almost a quarter since April.

First home buyers have started disappearing from the market, with lending by this group halving from the January 2021 peak.

"After years of being constrained by the burden of putting together an adequate deposit in the face of rising house prices, first home buyers are now finding that the affordability of repayments is limiting their borrowing capacity," Canstar group executive Steve Mickenbecker said.

Mr Mickenbecker said the Reserve Bank's cash rate increases were having the desired effect of stalling new lending and cooling the property market.

"Slower lending is yet to flow through to lower inflation and the 7.3 per cent inflation rate for the year to November will have disappointed the Reserve Bank, making a further 0.25 percent increase in the cash rate likely in February," he said.

Personal lending also fell 1.3 per cent, led by a 9.3 per cent fall in personal investment lending and a 2.9 per cent slowdown in new car loans.

The rate of lending for household goods rose 5.1 per cent to hit a new all-time high, and lending to fund travel and holidays remained a touch above pre-pandemic levels.

© AAP 2023

Senior colleagues are backing NSW Premier Dominic Perrottet after revelations he wore a Nazi uniform to his 21st birthday party, despite a leading crossbencher calling for his head.

Several ministers including at least one potential rival for his job are standing by the beleaguered Liberal leader but Shooters, Fishers and Farmers boss Robert Borsak insists Mr Perrottet should go.

"I'm not offended by the actions of Premier Perrottet, I am disgusted," Mr Borsak said on Friday.

"No amount of grovelling apology can make amends for a flawed personality."

Mr Borsak, whose Polish father was detained in concentration camps in Poland and Germany even though he was not Jewish, said Mr Perrottet could not apologise his way back to integrity.

"You have none," he told the premier. "Get out while you still have a chance".

Mr Perrottet says he has no intention of quitting amid the fallout, after disclosing his controversial costume choice on Thursday amid rumours about the 2003 party.

With the government already hobbled by the departure of multiple MPs in the lead-in to the March state election, other members of the parliamentary crossbench have also expressed disbelief.

"The premier and I are of a similar age and I could not even fathom dressing in that way in any occasion," Independent MP for Sydney Alex Greenwich told ABC Radio National on Friday.

"There is absolutely no excuse for it".

Greens MP Jenny Leong said, "fascist extremism is not a joke. People living every day with racism can't simply shake it away with a quick press conference like this government tried to do".

"The people of NSW deserve and expect so much more".

Mr Greenwich declined to say whether he would offer support for Mr Perrottet in the event of a hung parliament. The Greens declined to comment on the premier's leadership.

Meanwhile, deputy Labor leader Prue Car emphasised the government was "in chaos" two months from the election.

"This is a government that seems to be intent on destroying itself," she told reporters.

"The Liberal party are more focused on internal brawling ... than actually governing NSW."

Flanked by outgoing ministers Brad Hazzard and Victor Dominello, Mr Perrottet said on Friday he had overwhelming support from colleagues since confessing to his "naive ... mistake".

"But ultimately it's not about me," he told reporters.

"It's about the hurt ... that it caused many people across the state.

"It's not about politics. It's about doing what's right.

"I am focused now on really ensuring that people don't make the same mistake that I did all these years ago."

Asked if he was confident of leading the Liberals to the March 25 election, Mr Perrottet answered with a terse "yes" several times.

He referred to the coalition's infrastructure track record over 12 years as instilling confidence in voters.

Mr Perrottet's confession was prompted by a private warning on Tuesday from a cabinet colleague, identified by multiple media outlets as Transport Minister David Elliott.

He dismissed on Friday suggestions Mr Elliott had threatened him with the revelation, saying he wouldn't delve into "private discussions".

Mr Dominello said the premier had owned and apologised for his mistake.

"Absolutely, I back him in every day of the week," he said

Other senior coalition figures including Nationals leader Paul Toole and potential leadership rival, moderate Liberal Matt Kean, have publicly backed Mr Perrottet.

Shaking, red-faced and at points close to tears during his press conference on Thursday, the premier said he did not understand the gravity of what the Nazi uniform meant when he put it on.

Asked where he saw the humour in wearing a Nazi uniform, he suggested all people matured differently based on their experiences.

"I am not the person I was when I was 21," he said.

The incident came a year after Mr Perrottet joined the NSW Liberal Party and two years before he was appointed president of the NSW Young Liberals.

© AAP 2023