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ISCOVER
Staff Reporter
A surge in variable rate home loans proves a majority of borrowers had expected the RBA to cut rates in May, a Mortgage Choice spokesperson has claimed.
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According to the latest approval data from Mortgage Choice, the uptake of variable rate loans rose to 78 per cent in April from 74 per cent in March.
In fact, every state saw a rise in appetite for this loan type. The largest increase in popularity came from Victoria/Tasmania, where demand rose to 91 per cent.
“Fuelling a rise in demand for variable rate loans in April was most likely the expectation of a May cash rate cut. We believe many borrowers were eagerly awaiting the savings that this could bring to a variable rate loan,” Mortgage Choice spokesperson Belinda Williamson said.
“Clearly when rate cuts are imminent, and when borrowers are feeling more comfortable about the direction of rates, more borrowers are willing to ride the waves associated with variable rate loans.”
Concurrently, fixed rate loan demand dropped in April to 22 per cent from 26 per cent in March.
“In March, the demand for fixed rate loans hit its highest level in four years. This was on the back of a slew of competitive fixed interest rate drops by lenders. However, during April demand eased as lenders reversed this trend by upping their one, two and three-year fixed rates,” Ms Williamson said.
