Fixed-rate home loans grow in popularity
Article by Mozo
The number of Australian homeowners opting for a fixed-rate mortgage rose considerably last year, new figures suggest.
According to data from mortgage broker AFG, which was obtained by The Australian, fixed-rate home loans made up 12.6 per cent of all mortgages last month, up on just two per cent in December 2009.
AFG figures offer a good indicator of trends across Australia given that the broker currently processes about one in ten mortgages in the country.
Commenting on the rise in fixed-rate mortgages, AFG's Mark Hewitt said lenders had been aggressively marketing such products amid fears about potential interest rate rises.
He also told The Australian that he expected more competition in the market this year, partly driven by greater activity from smaller lenders who will seek to encourage borrowers to compare home loans and switch.
The AFG figures showed an overall fall in mortgage lending last year as home loans worth an estimated $27 billion were processed in 2010, down from $30 billion the previous year.
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