Record-low rates are driving an increasing number of borrowers to fix their mortgage.
According to national home loan approval data from Mortgage Choice, fixed rate home loans accounted for 26.64 per cent of all loans written in October – up from 25.45 per cent the month before.
Mortgage Choice spokesperson Jessica Darnbrough said with further cuts to the official cash rate in the coming months unlikely, borrowers seem intent on fixing their mortgage while rates are low.
“No doubt borrowers’ appetite for fixed rate loans has also been provoked by the ongoing competition for business among Australia’s lenders who continue to offer sharp pricing, significant mortgage discounts and other borrower incentives,” Ms Darnbrough said.
“It is pleasing to see that borrowers are taking advantage of the current home loan market by actively responding to lender incentives and making informed home loan choices,” she said.
Overall, fixed rates were most popular in Queensland, accounting for 31.25 per cent of all loans written in this state in October – 3.51 per cent up on the month prior.
Despite a 1.19 per cent drop in demand month-on-month, variable rate home loans continue to prove most popular with borrowers overall, accounting for 73.36 per cent of all loans approved in October.