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Demand for fixed rate loans has risen after a number of lenders, including the big four, increased their rates in October.
New research from Mortgage Choice has shown consumers are realising the easing cycle may be over, and have moved to fix their mortgages.
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According to the national new home loan approval figures, fixed rates accounted for 27.38 per cent of all home loans written in October – slightly higher than the 26.86 per cent recorded the month prior.
“While we have seen a number of lenders lift the interest on their suite of fixed rate products this month, the reality is, fixed rate pricing is still incredibly competitive,” Mortgage Choice's Jessica Darnbrough said.
“Furthermore, fixed rate pricing is likely to climb higher over the coming months. So, for those borrowers who want certainty around their mortgage repayments and wish to lock themselves into a product with a competitive interest rate, fixed rates are a viable option.”
Speaking with The Adviser, chief economist for AMP Capital Shane Oliver agreed consumers are seeing an end to the rate cutting cycle.
“It’s done, it’s over now … but there’s still plenty of great deals out there. We’re not going to see fixed rates leap all at once,” he said.
Western Australia saw the biggest jump in demand for fixed rates, surging 8.77 per cent over the month to 28.06 per cent.
South Australia and Queensland were the only states to record a dip in the demand for fixed rate products, where demand fell 4.39 per cent and 4.52 per cent respectively.
The figures were released on the same day as non-major lender ING DIRECT joined the major banks in announcing rises to a range of its fixed rate products.
