With variable rates at all-time lows and the prediction of further rate cuts to come, Mortgage Choice clients are steering away from fixed rate home loans.
Recent research from Mortgage Choice reveals demand for fixed-rate home loans fell significantly in September. Of all the home loans written during the month, only 14.41% were for fixed rate loans. This compares to 17.41% in August.
Why choose a variable rate loan?
Lenders are currently offering sizeable discounts on their variable rate loans and this is proving popular amongst borrowers. Ongoing discount products proved the most popular, making up 50.51% of all loans written last month.
These types of loans are particularly attractive when a borrower has either a 20% deposit for their new home purchase or 20% equity in their current home they are refinancing. This is because further discounts are generally on offer if the bank is lending less than 80% of the property value.
Variable rate loans also offer more flexibility than a fixed rate loan, such features can include:
- Unlimited extra repayments
- Redraw of extra repayments
- Option of a 100% offset account
- No break cost should you wish to refinance
While rates are low and there is little talk of any foreseeable rate hikes, borrowers will continue to opt for variable-rate products.
If you would like assistance in choosing the loan that suits your needs, call Ashley now on 0425 826 967