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ISCOVER
Staff Reporter
Dramatic reductions to fixed rate home loans have done little to increase demand for this type of product.
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Research released by Mortgage Choice today found the uptake of fixed rate home loans rose by less than 1 per cent over August.
Overall, fixed rates accounted for 14.1 per cent of Mortgage Choice’s home loan approvals last month, up only slightly from 13.3 per cent in July.
But while the lift in demand for fixed rate products was minimal, Mortgage Choice spokesperson Kristy Sheppard said she expected this to change over the month ahead.
“I expected the take-up of fixed rate home loans to grow noticeably in August due to the well publicised reductions many lenders have been applying to their fixed term pricing,” she said.
“Despite our lender panel’s average three-year fixed rate falling half a percent in the past four weeks alone, fewer than one in seven new mortgage holders fixed part or all of their rate last month
“Borrowers’ reticence to fix may also be influenced by memories of the break costs many people faced when considering switching out of their fixed terms during Spring 2008 to Autumn 2009 when the cash rate fell from 7.25 per cent to 3.00 per cent and home loan interest rates followed.”
