Over 20% of borrowers are choosing to fix their home loan, new data has revealed.
According to the latest national home loan approval data from Mortgage Choice, fixed rate home loansaccounted for 22.22% of all loans written in February, down slightly from 22.97% in January.
“While fixed rate demand was down slightly in comparison to last month, the fact that over 20% of borrowers are choosing to fix their mortgage is still significant,” Mortgage Choice franchise owner, Mrs Nandini Varma, said.
“Of course, given that so many lenders have raised their interest rates over the past few weeks, I am not surprised to see 1 in 5 borrowers opting for a fixed rate home loan.”
Looking ahead, Mrs Varma said she wouldn’t be surprised to see even more borrowers choosing to fix part or all of their mortgage, as lenders continue to lift their interest rates out of cycle with the Reserve Bank of Australia.
“In recent weeks, the Reserve Bank of Australia’s governor Philip Lowe has made it clear that future rate cuts are now more unlikely than likely. With this in mind, it would appear the only way for rates to go is up,” she said.
“As more lenders start to lift their rates, we may see more borrowers choosing to fix their mortgage in a bid to avoid further rate hikes and provide themselves with some certainty around their regular mortgage repayments.”
Across the country, fixed rate demand was highest in New South Wales, with this type of product accounting for 24.17% of all home loans written throughout the month of February.
Queensland wasn’t far behind, with fixed rate demand accounting for 23.32% of all loans written within the state.
Overall however, variable rate home loans – specifically ongoing discount mortgages – remained the most popular product amongst borrowers.
Within Australia, ongoing discount home loans accounted for 44.34% of all mortgages written.
Mrs Varma said with interest rates continuing to sit at near record lows, borrowers should be able to secure a good deal regardless of whether they choose a fixed or variable rate.
“At the end of the day, there is no right or wrong answer when it comes to selecting a home loan product, it all comes down to personal preference,” she said.
For more information, please contact Mrs Nandini Varma on 03 9363 3333 or visit www.mortgagechoice.com.au/nandini.varma
This blog is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.