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Demand for fixed-rate home loans fell significantly last month, according to new research by Mortgage Choice.
Fixed-rate loans accounted for just 14.41 per cent of all loans written in September – down from 17.41 per cent in August.
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Mortgage Choice CEO John Flavell said demand for fixed-rate home loans has not been this low since August 2011, when they accounted for 13.78 per cent of all loans written.
“It seems borrowers are increasingly opting for variable-rate home loans as they believe rates are unlikely to rise for some time yet,” he said.
“And, if the minutes of the Reserve Bank of Australia’s September board meeting are anything to go by, the official cash rate could be left on hold for the foreseeable future.”
Of the variable-rate products on offer, ongoing discount products once again proved the most popular with borrowers in September, making up 50.51 per cent of all loans written.
Standard variable-rate products made up 16.43 per cent of all loans written, while basic variable-rate products made up 14.07 per cent.
Line of credit and introductory variable-rate products accounted for 2.50 per cent and 2.08 per cent of all loans written respectively.
Mr Flavell added that while rates are low and there is little talk of future rate hikes, borrowers will continue to opt for variable-rate products.
[Related: Heritage cuts discount variable rate]
