Fixed rate home loans dip in February, says Mortgage Choice

Fixed rate home loans dip in February, says Mortgage Choice
Fixed rate home loans dip in February, says Mortgage Choice

Fixed-rate mortgages accounted for more than one in every five home loans in February, despite a small drop in demand, Mortgage Choice advised.

Fixed-rate home loans accounted for 22.28% of all loans written throughout February – just 1.34 percent down from the 23.62 percent from the previous month, according to the mortgage broker’s latest national home loan approval data. Mortgage Choice based its research on new borrowers who sourced a loan through it in February.

Chief executive John Flavell said while fixed rates saw a small drop in demand throughout February, they continue to prove a popular home loan product choice for many Australians.

“We are still seeing quite a bit of volatility in the interest rate market, causing many borrowers to opt for the security of a fixed rate home loan,” he said, while adding that going forward, he wouldn’t be surprised to see demand for fixed rate products taper off.

“Given the Reserve Bank of Australia has indicated that they won’t hesitate to cut rates again if the need arises, borrowers may be encouraged to take out variable rate home loans and take full advantage of the current low interest environment,” he said.

Across the country, demand for fixed rate products was highest in New South Wales, accounting for 28.42 percent of all home loans written in February.

Queensland and South Australia were not far behind, with fixed-rate demand at  23.64 percent and 17.29 percent respectively.

Meanwhile, Victoria and Western Australia saw lower demand for fixed rates, with only 16.92 percent and 13.23 percent of all loans written in each state respectively.

Overall, variable rate home loans remained the most popular with borrowers, with 77.72 percent opting for a variable rate mortgage in February.

“The property market may still be showing signs of volatility, but the reality is that interest rates continue to sit at all-time lows. So, regardless of whether a borrower takes on a variable or fixed rate mortgage they can rest assured that they’re securing a great deal,” Flavell said.

Property Observer looked up the best fixed rate products on www.mozo.com.au and found interest rates ranging from 3.79% to 4.44% on a period of one to three years.

Tags: 
Home Loans Mortgage Rate

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