Login
ISCOVER
Staff Reporter
Speculation that further rate cuts are on the way is causing fixed rate demand to wane.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
According to new data from Mortgage Choice, variable interest rate home loans continue to dominate the new loan approval market.
Demand for variable rate loans reached a six-month high in January, accounting for 83.65 per cent of the company’s new home loan approvals, while demand for fixed rate loans slipped for the second consecutive month – accounting for 16.35 per cent of newly approved loans.
“For two consecutive months now borrowers have fled from fixed rate loans and have instead opted for variable rates. This is the first occasion since July 2012 that demand for variable rates has been this high,” Mortgage Choice spokesperson Belinda Williamson said.
“These results come at a time when cash rate cuts from the Reserve Bank are still on the cards. There is now also the possibility of out-of-cycle variable rate cuts from lenders thanks to recent news of eased funding costs. In any case, we would expect to see any future rate cuts passed on in full to borrowers.”
