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By: Jessica Darnbrough
Two out of five brokers expect to see an upswing in demand for fixed rate products over the coming few months.
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According to The Adviser’s latest straw poll, 43.7 per cent of respondents expect there to be an upswing in demand for fixed rate mortgages.
Of the 223 brokers polleds, 53.8 per cent believe however, do not expect to see an increase in fixed rate demand, while the rest remain unsure.
Loan Market Group’s chief operating officer Dean Rushton told The Adviser that there was a strong probability of an upswing, however, it would primarily depend on what the RBA decides to do at the next few board meetings.
“If rates go up again, I expect to see a lot more fixed rate enquiries. Whether or not that will transfer into more fixed rate home loans however, is another matter altogether,” Mr Rushton said.
At present, demand for fixed rate mortgages is incredibly low, with most borrowers preferring to ride the variable wave.
According to the Australian Bureau of Statistics, fixed rate mortgages accounted for 2.4 per cent of all dwellings financed in April.
However, this figure was slightly up on the month before – with fixed rate products accounting for 2.1 per cent of all dwellings financed in March.
Bankwest’s head of broker sales Aaron Milburn said he expects this trend of increasing fixed rate demand to continue.
According to Mr Milburn, the recent reductions to fixed rates could spark borrower interest.
“All of the majors have now lowered their fixed rates, as well as many of the second tier lenders, so I would expect this to result in increased borrower enquiry,” Mr Milburn told The Adviser.
“I would think the recent rate reductions would also encourage a lot of borrowers to speak to their broker or lender for more information around fixed rates and whether a these products could work for them.”
