Fixed rate demand at nine month high: Mortgage Choice
The demand for fixed rates hit a nine month high in November as an increasing numbers of people choose to fix their mortgage, according to Mortgage Choice’s latest national home loan approval data.
Fixed rate loans accounted for 26.98% of all loans written last month, a slight uptick from 26.64% recorded in October.
Mortgage Choice spokesperson Jessica Darnbrough said that it is likely borrowers want certainty around their repayments as rates stay low.
“A growing number of borrowers are beginning to realise that while rates are low, they can’t stay this way forever. And as such, they are looking to fix their mortgage now while rates are sitting at historically low levels,” said Darnbrough.
“Furthermore, a lot of lenders slashed the interest on their suite of fixed rate products at the end of July and we are finally starting to see the result of those rate movements coming through in our data.”
Variable rates with an ongoing discount, however, remain the most popular product.
In New South Wales, fixed rates accounted for 34.13% of loans written in November, compared to 28.65% in Queensland. Meanwhile, South Australia recorded 20.23% fixed loans, while Victoria and Western Australia noted 19.77% and 16.94% respectively.
Darnbrough said it’s unsurprising to see variable rates still popular as they do remain low.
“That said, fixed rates are also very competitive which is why we are seeing an increasing number of borrowers opting for the safety of a fixed rate product. Of course with interest rates currently sitting at historical lows and Australia’s lenders competing aggressively for business, borrowers can be assured of securing a good rate regardless of which product type they opt for,” she said.
