Demand for fixed-rate home loans has continued to decline after hitting a four-year low in September.
According to the latest national home loan approval data from Mortgage Choice, fixed-rate mortgages accounted for just 13.88 per cent of all loans written in October – down from 14.41 per cent on the month prior.
Mortgage Choice CEO John Flavell said the last time demand for fixed-rate products was this low was back in June 2011.
“Fixed-rate demand has fallen every month for the last four months in a row,” he said.
“We had expected to see a slight lift in demand for fixed-rate products last month, after all of the majors decided to increase the interest rates on their suite of variable owner-occupied and investor products.
“That said, while the majors all raised their rates in October, most of the higher rates won’t come into effect until November 20. When this happens, we might start to see more property buyers opting for fixed-rate products.”
Looking at the states and territories, fixed-rate demand was highest in New South Wales and the ACT (17.31 per cent), followed by Western Australia (14.95 per cent), South Australia and the Northern Territory (12.76 per cent), and Queensland (12.36 per cent).
Victoria and Tasmania had the lowest level of fixed-rate demand at 8.85 per cent.
Of the variable-rate products, ongoing discount rates proved most popular at 52.80 per cent (up from 50.51 per cent in September), followed by basic variable rates at 15.91 per cent (up from 14.07 per cent), standard variable rates at 14.28 per cent (down from 16.43 per cent) and line-of-credit rates at 2.32 per cent (down from 2.50 per cent).
Introductory rate products were once again the least popular at 0.81 per cent – down from 2.08 per cent in September.