Fixed rates losing popularity

May 04, 2015
David Wilson

Most borrowers are banking on further rate cuts with home loan approval data from Mortgage Choice showing demand for fixed rates falling to its lowest level since February 2013.

Fixed rates made up just 17.91 per cent of all loans written in April, down from 18 per cent in March.

This fall in fixed rate demand is despite fixed rates being at record lows, with one lender on our panel offering a three year fixed rate of 4.14 per cent.

While variable rates aren't that low, borrowers are taking notice of Reserve Bank of Australia Governor Glenn Stevens who recent said, "further easing of monetary policy may be necessary to foster sustainable growth in demand and inflation consistant with target."

Demand for variable rates was even more pronounced in Victoria with, 88.44 per cent of borrowers selecting a variable rate product.

Most popular of the variable rate options was a rate with an ongoing discount for the life of a loan. The size of these discounts is determined by a number of factors including lender, loan amount and loan to value ratio.

If you need help deciding which rate is right for you, call us today on 03 9432 6070 or click on the 'contact us online' tab at the top of this page.
 

Posted in: Interest rates

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