Fixed-rate home loans back in favour

Tuesday 14 July 2009

Article by Mozo

Aussies looking to compare home loans are increasingly deciding that a fixed-rate deal is the most attractive option, new figures reveal.

Mortgage Choice reveals that fixed-rate packages accounted for 7.6 per cent of all mortgages approved last month, up from 6.6 per cent in May.

Commenting on the figures, the broker’s home loan expert Kristy Sheppard said that while this is still a small share of the market, borrowers seem to be betting that variable rates are going to rise in the coming months.

"Although only eight per cent of all approvals for June were for fixed loans, it looks like we are over the downward trend seen during much of last year," she said.

Variable rate deals became popular in the wake of the financial crisis when the Reserve Bank began cutting rates at an unprecedented rate, lopping 400 basis points off the cash rate before the year was out.

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