Variable rates remain the loan product of choice

Variable rates remain the loan product of choice
Jennifer DukeDecember 7, 2020

Latest home loan approval figures from Mortgage Choice suggest that it is variable rate home loan products that are continuing to prove popular.

In June, variable rate home loans accounted for 75.34% of all home loans written in the month – up 1.21% on May.

This comes as no surprise to Mortgage Choice spokesperson Jessica Darnbrough.

“The Reserve Bank of Australia has made it clear they are happy with the current setting of monetary policy and they could leave rates on hold for some time yet. With that in mind, more borrowers are opting for a variable rate home loan, rather than lock themselves into a fixed rate,” Darnbrough said.

Across the variable rate home loan offerings, ongoing discounts are currently the most popular – securing 39.62% of all loans written, with demand highest in Western Australia and New South Wales, 47.91% and 45.32% respectively.

“Australia’s lenders are hungry for business at the moment and, as such, have been offering some sensational variable rate discounts in a bid to attract borrowers and grow their market share,” she said.

Fixed rate demand was down in every state other than New South Wales and Queensland, where they were up marginally. Fixed rate demand dropped 10.44% in Victoria, and fell marginally across Western Australia and South Australia.

“While fixed rate demand has dwindled a little in certain states recently, the reality is borrowers can still secure themselves a very competitive rate – regardless if they opt for a variable or fixed rate home loan,” she said.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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