Fixed rates still the loan of choice: Mortgage Choice

Fixed rate mortgages dropped slightly in January, yet record high demand is still being seen for fixed rate loans, according to Mortgage Choice’s figures.

Throughout January, 27.43% of all loans were for fixed rates, a significant dip on December, which was 5.63% higher, however still at strong highs not seen since 200.

New South Wales borrowers were those most likely to opt for a fixed rate loan, at 33.62%. Queensland came in a close second at 30.77%. Meanwhile, Western Australia and Victoria were recorded at 21.39% and 21.20% respectively. South Australia saw 19.78% of borrowers opt for a fixed rate.

Last month, several lenders did cut the rates on a number of fixed products, such as National Australia Bank, which cut to a 20-year low of 5.44%, said spokesperson for Mortgage Choice, Jessica Darnbrough.

"If we look back at the last 10 years, on average, fixed rates accounted for 17.63% of all home loans written. So, the demand we are seeing for this type of product is currently sitting almost 10% higher than the long term average," Darnbrough said.

The strength of fixed loans is expected to continue.

"All of Australia's lenders are competing very aggressively on price within the fixed rate arena, and while this is happening more borrowers will opt to fix their mortgage,” she said.

"In the current economic environment and with the Reserve Bank keeping its cards close to its chest, it is not surprising to see a large percentage of borrowers opting for the safety of a fixed rate home loan."

You can see home loan comparisons here if you want to see which rates are currently available.