Variable home loans accounted for the overwhelming majority of mortgages last month

Variable home loans accounted for the overwhelming majority of mortgages last month
Variable home loans accounted for the overwhelming majority of mortgages last month

Variable rate home loans accounted for over 81% of all mortgages written throughout July 2018, according to the latest national home loan approval data from Mortgage Choice.

This was an increase of 0.48% from the month prior, and over 4% higher than the 12-month average.

"June’s national home loan approval data bucked the 11th month trend as fixed rate demand rose slightly, however July’s data confirms that borrowers are dedicated to variable rate products,” Mortgage Choice chief executive officer, Susan Mitchell said.

Across the country and for the seventh consecutive month, variable rate demand was the highest in Victoria, with 88.11% of borrowers opting for this type of product.

Next up was South Australia where 85.29% of borrowers chose a variable rate home loan. 

Western Australians were the least likely to opt for a variable rate product with 23.03% of borrowers in the state choosing to fix their home loan.

This was followed by New South Wales where 21.51% of borrowers chose fixed rate home loan products. 

Since Sydney has the highest median dwelling value in the nation in June at over $870,000, according to CoreLogic its unsurprising that borrowers in New South Wales continue to opt for fixed rate home loans.

“Interestingly, borrowers in Victoria do not appear to be as cautious. Consensus in the market is that interest rates will remain stable for the foreseeable future, which would encourage borrowers in Victoria to consistently opt for a variable rate product,” commented Ms Mitchell

Looking ahead, Ms Mitchell said she does not expect a significant change in borrower preference in the short term as the official cash rate is likely to remain on hold until at least next year. 

Ms Mitchell said regardless what type of home loan product a borrower has, if they have not reviewed their loan recently, now is a great time to do so. 

“For those looking to buy their first home or investment property, I encourage them speak to their local Mortgage Choice broker who can help guide them through their home buying journey," concluded Ms Mitchell

Tags: 
Home Loans Mortgage Choice

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