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Demand for variable rate loans increased in August, according to national new home loan approval figures from Mortgage Choice.
Basic variable rate loans amounted to 12.64 per cent of all new home loans at Mortgage Choice during the month of August, up from 10.99 per cent in July. Standard variable rate loans also saw a rise to 16.51 per cent, up from 14.94 per cent in July and up from 12.36 per cent in June this year.
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Mortgage Choice spokesperson Melissa McCarney attributed the demand to record-low interest rates.
“With the official cash rate at an all-time low after the cash rate cut in August, and talk of at least one more cut this year, borrowers appear to be taking advantage of recent sharp variable rate pricing,” she said.
Demand for fixed rate loans fell nationally; however, at state level, both New South Wales and Victoria saw a rise in demand for this loan type.
“It seems borrowers in both New South Wales and Victoria are keen to lock in rates now rather than banking on a further official cash rate cut in the months to come. For these borrowers, the security of a fixed rate home loan may be more appealing than the flexibility and features offered by variable rate loans,” Ms McCarney said.
