Borrowers choosing fixed rate home loans.
Home loan rates are their lowest levels in over 2 years and many buyers are choosing to lock into low 2 year fixed rates.
With the average fixed rate now sitting around 4.99 percent, with even three of the Big Four banks now offering fixed rates below 5 percent, the amount of buyers looking to secure a fixed rate loan has tripled. In fact fixed rates are now around 60 to 70 basis points lower that the average variable rate loan, which is around 5.6 percent. It would take 3 or 4 rate cuts for variable rates to get that low and that scenario is not likely, Mozo's Kirsty Lamont told the Sydney Morning Herald.
According to the Commonwealth Bank, they are seeing almost 25 percent of clients taking up fixed rate home loans. And of those customers around 80 percent are choosing the 2 year fixed rate option. The NAB are noticing a similar trend on their recently cut 4.99 percent 2 year fixed rate loans.
Bucking the trend is the ANZ whose two year fixed rates sit above 5 percent and have not reported any shift in popularity towards the product.
The new current trend towards fixed interest rates shows that home buyers are looking to secure the best possible rates for the longest period. Anyone seeking to follow the new trend should begin with a home loan comparison to find the markerts best fixed interest rates.
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