Fixed rate demand hits four year low

Vol 107, October 2015

Fixed rate home loan demand fell significantly last month, new research has revealed.

According to the latest national home loan approval data from Mortgage Choice, fixed rate home loans accounted for just 14.41% of all loans written throughout the month of September – down from 17.41% the month prior.

Local Mortgage Choice franchise owner Antony Muir said demand for fixed rate home loans hasn’t been this low for more than four years.

“The last time fixed rate demand was this low was back in August 2011, when this type of home loan accounted for 13.78% of all home loans written,” he said.

“It seems borrowers are increasingly opting for variable rate home loans as they believe rates are unlikely to rise for some time yet. And, if the minutes of the Reserve Bank of Australia’s September Board meeting are anything to go by, the official cash rate could be left on hold for the foreseeable future.”

In the September Board meeting, the Reserve Bank said inflation was forecast to remain consistent with the target over the next one to two years.

“If this proves to be the case, we could see rates left on hold for some time yet,” Mr Muir said.

Across the country, demand for fixed rate home loans was weakest in Victoria, where this type of product accounted for just 8.61% of all loans written.

Western Australia was not far behind, with fixed rate home loans accounting for 12.35% of all loans written. At the other end of the spectrum, fixed rate demand was strongest in New South Wales, with this type of product accounting for 16.65% of all loans written.

Of the variable rate loans on offer, ongoing discount products once again proved the most popular with borrowers, with this type of product making up 50.51% of all loans written in September.

“While the property market is showing signs of volatility at the moment, one thing is constant – low rates,” Mr Muir said.

“While rates are low and there is little talk of future rate hikes, borrowers will continue to opt for variable rate products.”

 

 

NSW/ACT

VIC/TAS

QLD

SA/NT

WA

 Variable

83.35%

91.39%

84.76%

84.21%

87.65%

Basic Variable

11.10%

18.37%

13.93%

23.21%

7.66%

Standard Variable

18.09%

17.95%

14.15%

10.79%

19.94%

Ongoing Discount

50.28%

48.64%

53.88%

47.35%

47.60%

Line of Credit

2.37%

2.57%

2.50%

2.29%

3.23%

Introductory Rate

1.51%

3.86%

0.30%

0.57%

9.22%

 Fixed

16.65%

8.61%

15.24%

15.79%

12.35%

                     

 

Call Mortgage Choice Bundall today on 07 5504 5569 for an appointment and let us help you achieve your financial goals alternatively please visit the following pages for futher information and daily updates:

MortgageChoiceBundall/antony.muir

https://www.facebook.com/MortgageChoiceBundall

https://plus.google.com/MortgageChoiceBundall 

 

 

 

 

Important information

This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.

About Mortgage Choice

Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.

Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.

Since that time, the company has grown and developed into a fully fledged financial services provider.

Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.

Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.

Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).

Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.

Recent recognition: 2014 Australian Broking Awards Best Diversification Program; 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education;   No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.

Visit www.mortgagechoice.com.au or call customer service on 13 77 62.

 
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