What do you think? Should you fix your rate, or keep it variable?
The lovely Lauren Booke from Corporate Affiars has released her latest media release today in relation to the surge we are currently seeing in variable rates.
This is quite the change from a recent surge in fixed rates that we saw as the RBA kindly dropped rates to the current all time lows, that we are still experiencing. Interestingly though, QLDers are still keen to fix compared to the rest of the counties borrowers. Are our QLD customers still uncertain what the RBA will do with interest rates in the coming months, so they are still fixing at these great low rates. Or will that trend has now swing back towards the majority keeping things more flexible, in line with the rest of the country. Are you holiding out for rates to drop further before fixing?
Read on for Lauren's relevant market info on the debate.
Variable rate demand surges in September
Published: 1st October, 2013 by Lauren Booke. Mortgage Choice Corporate Affairs
With speculation growing that the Reserve Bank of Australia could be set to make further cuts to the official cash rate in the coming months, a growing number of borrowers are opting for variable rate home loans, according to national new home loan approval figures from Mortgage Choice.
Variable rate home loans jumped to their highest level since February 2013, accounting for 73.14% of all home loans written in September.
Of the variable rate products, ongoing discount rate loans again proved the most popular amongst borrowers, with these loans accounting for 39.52% of all loans written.
Mortgage Choice spokesperson, Jessica Darnbrough, said it is unsurprising to see so many homebuyers choosing variable rate home loans especially given the competitiveness amongst lenders.
“Interest rates are currently at historically low levels and there is evidence to suggest they could fall further still. Lenders are not only competing aggressively for market share through very sharp pricing, but other incentives as well, including fee waivers, refinance rebates and cash-back offers to name but a few,” Ms Darnbrough said.
“With this in mind, it is not unreasonable for borrowers to opt for a variable rate home loan.”
While variable rate home loan approvals are on the rise, fixed rate demand slipped to an eight month low of 26.86%.
Interestingly, Queensland was the only state that didn’t record a drop in approvals for this loan type, with fixed rate demand jumping 4.24 percentage points to 36.40%.
“It seems borrowers in Queensland are still feeling uncertain about current economic conditions and so are keen to lock in rates now rather than relying on a further rate cuts,” Ms Darnbrough said.
“By locking into a fixed rate, borrowers are provided with a level of certainty and stability – something Queenslanders appear to be calling out for.”
Contact us today if you would like to fix your rate, look at your home loan options, or just get some more information, we're on 33669982.
(Image courtesy of mortgagebrokersperth.net)