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ISCOVER
Staff Reporter
New borrowers are making the most of increased competition between lenders, with the majority choosing a variable rate mortgage.
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According to Mortgage Choice, variable rate loans accounted for 90 per cent of all new loans written nationally in March 2011 – the highest level in five months.
Demand for fixed rate loans fell to 10 per cent of home loan approvals.
Mortgage Choice spokesperson Kristy Shepard said while many lenders had readjusted their variable rate home loan packages in recent months in a bid to entice borrowers.
“A widening array of special lender offers such as variable interest rate and loyalty discounts, higher maximum LVRs and payments of various switching and establishment costs are deterring a growing proportion of new borrowers from taking up fixed interest rate home loans,” Ms Shepard said.
“People are either more confident of cash rate stability, more confident of their ability to ride predicted interest rate hikes or they have weighed up the pros and cons of going with variable over fixed and decided the benefits are worth any risks.”
