According to the latest data from Mortgage Choice, the amount of fixed rate home loans being approved has been on the rise throughout the month of November.
In October fixed rate home loans hit a four year low, accounting for only 13.88% of home loans being approved. Last month, that increased to 17.39%, as many big lenders raised their variable interest rates, despite the RBA’s decision to keep the official cash rate steady at 2% throughout the Christmas season. By comparison, stats from our home loan database have revealed a downward trend in fixed rates from most major providers, with 22 lenders making cuts to fixed rates and only 5 increasing them.
While discount variable rate products are still the most popular for mortgage holders, the demand for fixed rate loans has risen in four out of five states. NSW recorded the strongest demand with fixed rate home loans accounting for 24.59% of all loans written, with Western Australia next at 16.81% and Queensland a close third at 15.83%. South Australia and Victoria experienced considerably less increase in demand, with fixed rates accounting for 12.37% and 8.89% respectively.
The increased demand comes as consumers seek out security for their home loans. Mortgage Choice chief executive officer John Flavell said that “Australia’s lenders made it clear in October when they raised their rates that additional rate hikes could be on the cards. In order to avoid any future rate hikes and obtain some surety around their mortgage repayments, I believe we will see more Australians locking into a fixed rate home loan.”
He also added that despite interest rates being likely to rise in the future, the market was still competitive and consumers could feel assured of securing a great deal on their home loan, whether with fixed or variable rates.
To find the lowest rates for your particular loan amount and property value, check out Mozo’s Home Loan Comparison tool.