April 01, 2015
New data shows fixed rates continue to fall out of favour with borrowers, with demand for this type of product tumbling for the fourth consecutive month.
According to the latest national home loan approval data from Mortgage Choice, fixed rate home loans made up just 18.00% of all loans written throughout March – a two year low.
Fixed rate demand has dropped from all-time highs to near record lows. Since December 2013, fixed rate demand has dropped approximately 15%, falling from the historical high of 33.06%.
Of course, with a majority of economists now predicting that the Reserve Bank of Australia will cut the cash rate again at either the April or May Board meeting, it is not surprising to see a larger number of borrowers opting for variable rate products.
History has shown us that when the cash rate drops, many of Australia’s lenders follow suit, trimming the interest on their suite of variable rate products. And, looking at our latest Home Loan Choices data it is clear that borrowers are not wanting to lock themselves into a fixed rate home loan in order to take advantage of any future rate cuts.
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