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Variable rates continue to dominate borrower demand, according to new research by Mortgage Choice.
The group’s latest national home loan approval data found variable rates accounted for 82.47 per cent of all loans written in June – up from 81.83 per cent on the previous month.
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Mortgage Choice CEO John Flavell said the lift in variable rate demand wasn’t surprising given the speculation that another rate cut may be in the works.
“The Reserve Bank of Australia governor, Glenn Stevens, has made it crystal clear in recent weeks that the board will cut rates again if needed,” Mr Flavell said.
“But regardless of whether the Reserve Bank cuts the cash rate again in the short to medium term, it is clear that the board has no intentions of raising the official cash rate any time soon.
“With that said, it is no wonder we are seeing more borrowers opt for variable rate products. Borrowers want to be able to take advantage of any further rate cuts and a variable rate home loan allows them to do just that.”
Of the variable rate products on offer, ongoing discount home loans accounted for 46.46 per cent of all loans written.
This was followed by standard variable rate products at 16.88 per cent and basic variable rate products at 14.79 per cent.
Introductory rate loans and line of credit products showed a decrease in demand, accounting for just 2.44 per cent and 1.86 per cent respectively of all loans written.
[Related: Home loan demand hits six-year high]
