The recent popularity of fixed rates is beginning to wane as more and more borrowers become comfortable taking out a variable rate mortgage.
According to the latest home loan approval figures from Mortgage Choice, variable rates accounted for 76.06% of all home loans written in March – up from 73.92% the month before.
The lift in demand for variable rate products wasn’t surprising given the recent period of stability in interest rates.
“In the April Board meeting, the Reserve Bank suggested the most prudent course of action for the Australian economy was a prolonged period of interest rate stability,” she/he said.
“With the Reserve Bank indicating that rates could stay on hold for the foreseeable future, borrowers are understandably, becoming increasingly comfortable taking out a variable rate mortgage.
“Moving forward, we expect demand for this type of product will continue to grow.
Of the various variable rate products available, the ongoing discount rates continue to prove the most popular amongst borrowers, with this type of loan accounting for 43.71% of all home loans written throughout March.
But while demand for variable rate products continues to grow across the country, fixed rates still account for almost one quarter of all loans written – almost 10% higher than the 10 year historical average.
Regardless of what type of product you opt for, you can guarantee the mortgage will have a very sharp interest rate. Australia’s lenders are competing for business at the moment through aggressive borrower incentives and home loan pricing,