Fixed rates in favour
Fixed rate home loans are increasingly in favour, according to a financial comparison website's recent analysis.
RateCity, using latest housing finance data from the Australian Bureau of Statistics, records that 9,932 fixed home loans were written in July 2013. This was more than double the number of that written in July 2012, at 4,509.
Loans written in the 12 months to July 2013 increased across the board compared to the year to July 2012, with 28,000 more fixed home loans written.
Alex Parsons, CEO of RateCity, said that fixed rates had been dropped below 5% in recent months and this may be contributing to this.
The average one-year fixed rate on their database is 4.94%, Parsons said. A year ago this figure was 5.92%. Standard variable rates are down by 0.88%.
“Competition at the pointy end of the fixed rate home loan market is heating up and fixed rates are now available from just 3.99% for one year,” he said.
“Demand for fixed rates increased to almost a third of all home loan applications at RateCity in the past few months, compared with less than 10 percent last year, and we expect that growth to continue while rates stay this low".
