Although the popularity of fixed rate home loans remains higher than the last couple of years, it barely rose as 2011 began.
Has the increasing concern among consumers about further rate rises settled?
Our new data shows 15.3% of the home loans approved for our customers in January had a fixed interest rate. This compares to 15.2% in December, 11.2% in November, 7.7% in October and 3.7% in September.
Uptake increased for the fourth consecutive month in the majority of states, by an average of 2.2 percentage points, but dropped in QLD and WA, by 2.9 and 2.8 percentage points respectively.
Of all the mortgage types, ongoing discount loans – where the interest rate is discounted over the entire loan term usually in return for an annual fee – experienced the biggest increase in demand. They accounted for 25.3 percent of our January approvals, having risen 8.4 percentage points in the last two months.
Notwithstanding this trend standard variable rate home loans continue to be the favourite, at 30.7% of approvals, followed by the ongoing discount loan category, which overtook basic variable loans at 23.6% of approvals to hit second spot.
Demand for line of credit home loans (often popular with investors) dropped a little to 4.8% of approvals from 5.4% the month prior while introductory rate home loans accounted for only 0.2%.
Are you looking to get a home loan this year? Would you consdier getting a fixed rate home loan? Let us know by leaving a comment below.