May 05, 2011
New home loan borrowers are lapping up at an increasing rate the range of ongoing discount products on offer, according to Australia's largest independently-owned mortgage broker.
Every state saw a rise in demand for this loan type during April as it reached a high of 30% of Mortgage Choice's new loan approvals nationally.
This is the strongest appetite seen since the broker began differentiating ongoing discount loans from others in its data reporting six months ago.
The popularity of fixed rate home loans also jumped, to 12% from 10% the month previous, reversing the falling popularity for fixed rates experienced during February and March.
Company spokesperson Kristy Sheppard said, “Ongoing discount rate home loans have shot ahead to be the number one choice for Mortgage Choice's new customers. They accounted for 30% of our loan approvals in April, jumping five percentage points on March's result.”
“Ongoing discount and fixed rate home loans were the only product types to experience an increase in demand nationally last month. This was the case in almost every state, with the exceptions being Victoria and South Australia.
“Consumer conservatism is seeing Australians taking advantage of discounts and bargain shopping wherever they can. This includes their home loan.”
The demand for standard variable rates dropped to 28% of new loan approvals in April from 30% in March and basic variable home loans fell to 22% from 25%. The popularity of line of credit home loans, which are often popular with investors, dropped one percentage point to 4% of approvals while introductory rate loans remained relatively steady at 4%.
Note: Mortgage Choice currently writes one in 25 new home loans in Australia, equating to over $10 billion in approvals per year, hence it provides a clear insight into borrower preferences. The 18+ year old mortgage broker has a loan book of over $40 billion.
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