Australians 'still unsure over fixed-price home loans'

Monday 10 August 2009

Article by Mozo

Customers looking to compare low interest home loans are staying away from fixed-price deals, it has been claimed.

According to new data from Mortgage Choice, demand for the product stood at eight per cent of all approvals in July.

Meanwhile, demand for variable-rate home loans remained at 87 per cent, with 46 per cent made up of basic versions and 41 per cent of standard versions.

The percentage of customers opting for fixed-rate deals is still slightly high, but shows many are still unsure over the direction of the market, suggested Mortgage Choice senior corporate affairs manager Kristy Sheppard.

"It is completely understandable that Australians are wary of fixing their home loan term, given lenders continue to raise fixed rates to a point where they are much higher than variable rates," she explained.

Ms Sheppard added fixed rate have been increasing in price for around three months, but suggested predictions of more rises could see the number of customers locking in their price swell.

In other news, the International Monetary Fund recently suggested there could be a problem obtaining credit if house prices were to take a serious hit.

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