Variable home loans favoured by new buyers
Article by Mozo
First-home buyers are showing a preference for variable rates when picking their home loan deal as many expect rates to fall further.
Amid a time of economic turmoil, Mortgage Choice statistics cited by the Australian Associated Press (AAP) show that take up of variable deals in August was at a five-year high.
Collectively, standard and basic variable rate home loans accounted for 80 per cent of all mortgage lending approved during the month.
Meanwhile, fixed-rate deals accounted for only five per cent.
“They are adopting a wait-and-see approach by favouring variable rate loans,” commented Mortgage Choice’s Warren O’Rourke.
He added that many first-home buyers are expectant that the Reserve Bank will cut rates again before Christmas.
In a separate article, the AAP has also pointed to money experts who forecast that another rate cut will come as early as next month.
ANZ money guru Katie Dean said that despite a desire to maintain rates, financial turmoil in the US may force the bank to make another cut.