Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
Mortgage Choice chief not surprised by rate trend

Mortgage Choice chief not surprised by rate trend

Fixed rate demand continues to wane, with the vast majority of borrowers opting for variable rate home loans, according to the latest national home loan approval data from Mortgage Choice.

The data, released last week, found that fixed rate home loans accounted for 17.40 per cent of all loans written in October. While this was slightly higher than the 16.72 per cent recorded the month prior, it is significantly lower than the 12 month average of 20.83 per cent.

Mortgage Choice chief executive officer John Flavell said the data would suggest that fixed rate home loans have fallen out of favour with borrowers.

Advertisement
Advertisement

“With the Reserve Bank of Australia clearly indicating that rate hikes are a long way off, I’m not surprised to see more people opting for variable rate mortgages,” he said.

“Borrowers are savvy, they understand that interest rates are more likely to fall than rise over the short to medium term. As such, they feel comfortable opting for a variable over a fixed rate mortgage.”

Across the country, fixed rate demand was lowest in Victoria, with this type of product accounting for just 5.88 per cent of all loans written throughout the month of October.

“If we look at the historical data we can see that the level of fixed rate demand in Victoria is the lowest it has ever been,” Mr Flavell said.

“Meanwhile, Queensland is currently enjoying quite strong fixed rate demand by historical standards. As per the data, fixed rate mortgages accounted for 23.80 per cent of all loans written within the state last month – slightly higher than the 19.89 per cent recorded the month prior.”

Demand for fixed rate products was also strong in NSW, with this type of home loan accounting for 19.62 per cent of all loans written.

Of all of the loan products on offer across the country, ongoing discount products proved the most popular with borrowers, with this type of home loan accounting for 45.66 per cent of all loans written.

[Related: Banks offering 'significant discounts' to property investors]

Mortgage Choice chief not surprised by rate trend
mortgagebusiness

 

Latest News

Regulators could move to set caps on loan volumes for borrowers with high debt-to-income ratios if the housing market recovery continues to ...

The federal Treasurer has welcomed the final budget outcome for the 2019 financial year, which shows that the deficit now equates to zero pe...

The Federal Reserve has slashed rates for the second consecutive month, “reinforcing” the necessity of further cuts to the cash rate in ...

FROM THE WEB
podcast

LATEST PODCAST: New lending launches

Do you think the mortgage market will see more consolidation this year?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.