Demand for fixed rates at an eight-month high: Mortgage Choice

Interest rates remain at record lows and borrowers are increasingly opting for fixed rates.

Fixed rate loans now account for 26.64% of all loans written in October, compared to 25.45% in September and an eight month high, according to the national home loan approval data from Mortgage Choice

Mortgage Choice Spokesperson Jessica Darnbrough said that it’s unlikely we’ll see any more cuts to the official cash rate and as a result borrowers are keen to fix.

“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,” 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.”

In the ACT and New South Wales, demand for fixed rates is at 31.54%, closely followed by Queensland at 31.25%. South Australia and the Northern Territory recorded fixed rate demand at 23.44%. Victoria and Tasmania at 19.34% and Western Australia at 16.14% were the least likely to opt for fixed loans.

Variable rates, of course, remain the most popular.

“Regardless of whether borrowers choose a fixed or variable rate mortgage, they will be sure to secure themselves a sharp deal,” Darnbrough said.

“With record low interest rates and ongoing lender competition, the prospects of getting a great deal on your home loan couldn’t be better.”