Nearly one in three Australians have fixed rate mortgages, new data has shown.
The latest national home loan approval data from Mortgage Choice found fixed rate home loans accounted for 31.05% of all loans written throughout the month of August, up from 29.63% in July.
“Fixed rate demand is now at its highest level since December 2013, when fixed rate home loans accounted for 33.06% of all loans written,” Mortgage Choice chief executive officer John Flavell said.
“The growing popularity of fixed rate mortgages is not a surprise. Recently, we have seen a number of Australia’s lenders cut the interest rates charged on some of their fixed rate products.
“As a result, fixed rate home loans are now very competitively priced, which has made them more attractive to homeowners who are looking for repayment security.”
Across the country, fixed rate demand was strongest in Queensland, with this type of home loan accounting for 35.48% of all loans written throughout the month of August, up from 28.08% last month.
Not far behind were South Australia and New South Wales, with fixed rate loans accounting for 34.40% and 33.66% respectively.
Variable rate home loans, specifically ongoing discount products, remained the most popular product with borrowers across the country.
In Australia, ongoing discount home loans accounted for 40.7% of all mortgages written in the month of August.
Looking ahead, Mr Flavell said it remained to be seen what would happen with fixed rate demand.
“We are now in the spring selling season and we are starting to see a lot of rate competition between Australia’s lenders.
“Over the past couple of weeks, we have seen lenders trim the interest rates across their fixed and variable home loan products, which is great news for anyone looking to buy a property, refinance or upgrade.
“There is a lot of movement and complexity in the market, so it is important for buyers and borrowers to speak to their local broker who can find the right home loan for their needs.”