Click to Search
   MEMBER LOGIN Username    Password  Remember me Click to Login Forgotten password?  About REINSW  Contact Us   
:: Lastest News Backup
Click to print page
Fixed rate home loan demand rises
Released 7 October 2010

The popularity of fixed rate home loans is on the rise, reaching 3.7% of all new loan approvals in September for Mortgage Choice, Australia’s largest independently-owned mortgage broker.  

This occurred as the demand for standard variable loans fell for the second month, to 48.1%, while basic variable loan demand rose for the second month, to 43.0%.

Mortgage Choice spokesperson Kristy Sheppard said the company’s loan approval figures show new borrowers are becoming more cautious about the interest rate landscape.

“We saw the popularity amongst new borrowers of fixed rate home loans rise in September in every state apart from South Australia and Western Australia. This resulted in a one-year high of 3.7% of all our new loan approvals nationally,” she said.

“It’s the second consecutive monthly growth in demand for this loan type and I’d say that trajectory will continue as we head into an environment of rising variable rates. I do find it interesting that it’s taken so long for this trend to kick off, given all the talk about expected cash rate increases over the next year or so. Of course, fixed term loans are more restrictive and can incur significant break fees so that would be a deterrent, as would the premium you pay to fix.

“At the same time, standard variable loan demand fell over September and August, which was offset by a rise in basic variable loans – loans that have fewer features and are often cheaper than their more feature-filled and flexible sibling.”