One in four home loans are fixed: Mortgage Choice

One in four home loans are fixed: Mortgage Choice
One in four home loans are fixed: Mortgage Choice

Fixed rate home loans accounted for nearly a quarter of all home loans in Australia in January, reflecting the uncertain interest rate environment, says lending broker Mortgage Choice.

Demand for fixed rate home loans has hit its highest level in more than 12 months, national home loan approval data from ASX-listed Mortgage Choice shows.

Fixed rate home loans accounted for 23.62% of all loans written in January, up from 19.44% in the previous month. 

“Home loan interest rates are incredibly volatile at the moment. Consumers are unsure whether or not Australia’s lending institutions are going to raise or cut their home loan interest rates,” said Mortgage Choice chief executive officer John Flavell.

“With that in mind, it is not surprising to see a growing number of borrowers looking for some safety and security around their home loan repayments in the form of a fixed rate mortgage.”

Flavell said the last time demand for fixed rate home loans was this high was back in November 2014 when there was a similar level of complexity and confusion around interest rates. 

“Over the coming few months, I wouldn’t be surprised to see demand for fixed rates continue to increase slightly.”

Queensland recorded the strongest demand for fixed rate products, with this type of loan accounting for 31.12% of all home loans written throughout January. 

New South Wales and Western Australia were next, with 24.07% and 23.15% respectively. 

Victoria and South Australia were at the other end of the spectrum, with fixed rate products making up 13.09% and 20.03% of all loans written in each state respectively. 

But while demand for fixed rate products across Australia grew in January, variable rate home loans – specifically ongoing discount mortgages – remained most popular with borrowers. 

Across Australia, 49.53% of borrowers took out an ongoing discount variable rate home loan – down from 52.07% in the previous month.

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One in four home loans are fixed: Mortgage Choice  

Tags: 
Home Loans Mortgage Rate

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