Fixed rate demand bounces back

 

A jump in fixed rate demand means this type of product now accounts for almost one in every four home loans written.

 According to Mortgage Choice’s latest national home loan approval data, fixed rate home loans accounted for 23.15% of all loans written throughout the month of March – up 0.87% from the 22.28% recorded the month prior.

 “I wasn’t surprised to see fixed rate demand rise over the month of March and I believe it is a sign of things to come,” Local Mortgage Choice franchise owner Rhye Livingstone said.

 “Last week, it was announced that 15 of Australia’s largest banks will soon be forced to meet new rules that will limit their reliance on short-term wholesale funding.

 “These new rules could force bank funding costs higher. If this happens, we may see some of Australia’s lenders passing on these higher costs to their customers by way of higher rates. As a result, I wouldn’t be surprised to see an increasing number of borrowers looking to fix their mortgage to avoid any potential rate increases.”

 Looking across the country, demand for fixed rate products was highest in Western Australia, with this type of product accounting for 26.91% of all home loans written throughout March.

 New South Wales was next in line, with fixed rates accounting for 26.40% of all loans written. Victoria on the other hand, boasted the lowest demand for fixed rate home loans, with this product accounting for just 12.70% of all home loans written.

 Despite the small lift in fixed rate demand across the country, variable rate home loans – specifically ongoing discount products – continued to prove the most popular with borrowers.

 In New South Wales, ongoing discount products accounted for an astonishing 51.28% of all loans written throughout the month.

 Speaking about the results, Mr Livingstone said ongoing discount home loans will always prove popular with borrowers as they seek to hunt down a competitive interest rate.

 “Variable rate loans will no doubt remain the most popular product with borrowers for years to come as it allows them to take advantage of rate reductions when they occur. That said, given that the interest rate market is incredibly volatile, I would expect to see more borrowers looking to lock in at least part of their mortgage,” he said.

For more information, please contact Rhye Livingstone on 0459 958 893 or visit https://www.mortgagechoice.com.au/rhye.livingstone

 

 

NSW/ACT

VIC/TAS

QLD

SA/NT

WA

 Variable

73.60%

87.30%

74.01%

80.73%

73.09%

Basic Variable

12.31%

24.39%

14.96%

22.08%

24.86%

Standard Variable

8.70%

15.69%

10.68%

9.26%

9.93%

Ongoing Discount

51.28%

43.07%

46.27%

47.32%

37.71%

Line of Credit

1.28%

4.15%

2.01%

1.46%

0.59%

Introductory Rate

0.03%

0.00%

0.09%

0.61%

0.00%

 Fixed

26.40%

12.70%

25.99%

19.27%

26.91%

                     

 

For further information, photos of the new logo, or to arrange an interview, please contact:

 Rhye Livingstone

Mortgage Choice Frankston

Ph 0459 958 893

Rhye.livingstone@mortgagechoice.com.au

 Important information

This article 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.

 About Mortgage Choice

Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.

Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.

Since that time, the company has grown and developed into a fully fledged financial services provider.

Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.

Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.

Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).

Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.

Recent recognition: 2014 Australian Broking Awards Best Diversification Program; 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education;   No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.

Visit www.mortgagechoice.com.au or call customer service on 13 77 62.

Posted in: Interest rates

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