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Variable loans now represent more than three-quarters of Mortgage Choice’s volumes.
The group reported that 75.34 per cent of its home loans in June were variable loans – up from 74.13 per cent in May. Of those, 39.62 per cent were ongoing discounts.
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Spokesperson Jessica Darnbrough said the increasing popularity of variable loans reflected the fact the cash rate was likely to stay at a record-low 2.5 per cent for the foreseeable future.
“With that in mind, more borrowers are opting for a variable rate home loan, rather than lock themselves into a fixed rate,” she said.
"There is little wonder why ongoing discount products are proving so popular. Australia's lenders are hungry for business at the moment and, as such, have been offering some sensational variable rate discounts in a bid to attract borrowers and grow their market share."
While variable loans rose in June, fixed-rate loans declined from 25.87 per cent to 24.66 per cent. However, Ms Darnbrough said very competitive rates were still available.
“Australia's lenders have a real appetite for mortgages at the moment. And, as such, they are willing to offer sharply priced rates, significant discounts and other incentives, including cashback offers,” she said.
[Related: Competition forcing banks to cut rates]
