Fixed rates no longer favoured as borrowers turn to variable: Mortgage Choice

Fixed rates no longer favoured as borrowers turn to variable: Mortgage Choice
Jennifer DukeDecember 7, 2020

The latest home loan approval figures have found that variable rates have soared 73.92% from the month before, according to Mortgage Choice.

Variable rates accounted for 76.06% of home loans written in March, explained spokesperson for Mortgage Choice Jessica Darnbrough, who said this was unsurprising given the recent period of interest rate stability.

Darnbrough pointed to the RBA’s comments of a prolonged period of interest rate stability at their April board meeting yesterday, where they kept the rate on hold.

“With the Reserve Bank indicating that rates could stay on hold for the foreseeable future, borrowers are understandably, becoming increasingly comfortable taking out a variable rate mortgage,” she said.

“Moving forward, we expect demand for this type of product will continue to grow.”

The most popular of the variable rate products available are the ongoing discount rates, accounting for 43.71% of loans written through March.

Victoria saw the most borrowers keen for this type of home loan, at 81.25% of mortgages written. Meanwhile, Western Australia, South Australia, Queensland and New South Wales saw 78.47%, 77.52%, 75.05% and 73.18% of this type of loan written respectively.

“Regardless of what type of product you opt for, you can guarantee the mortgage will have a very sharp interest rate. Australia’s lenders are competing for business at the moment through aggressive borrower incentives and home loan pricing,” Darnbrough said.

To read more about interest rates, see Property Observer's most recent articles on the topic here.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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