Less demand for fixed rate home loans

Wednesday 14 October 2009

Article by Mozo

Fewer people opted for fixed rate home loans throughout September, according to new research.

An Australian Associated Press report highlighted the new figures gathered by Mortgage Choice, which suggested 4.56 per cent of people looking at home loan rates opted for fixed products.

This is compared to 6.98 per cent in August.

Meanwhile, variable rate mortgage popularity increased, with 95.44 per cent of new home loans customers choosing this option, up on 93.02 per cent the previous month.

Kristy Sheppard, Mortgage Choice corporate affairs manager, noted the demand for fixed rate home loans has not been as low since April.

She said: "Given the vast majority of fixed loans are priced between 100 and 250 basis points above variable loans, the result is not surprising, despite most borrowers being aware of imminent rate rise."

The Australian Bureau of Statistics recently recorded a lower level of mortgage uptake – including low interest home loans – during August.

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