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ISCOVER
Staff Reporter
The stable cash rate is encouraging more borrowers to look at fixing their home loans, new research has revealed.
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According to the latest data from Mortgage Choice, the number of fixed rates rose 5 per cent in August to account for 20 per cent of all mortgages written.
Mortgage Choice customer data for August 2012 shows that as fixed rate loan popularity grew so did that of basic variable rate loans, which reached a 14-month high of 21 per cent of all new loans.
“This news comes as lenders have been tweaking their fixed rate loans, making the price of such loans more competitive in some cases when compared to variable rates,” Mortgage Choice spokesperson Belinda Williamson said.
“Looking at Mortgage Choice’s lender panel, the average three-year fixed rate, the most popular fixed rate term, currently sits at just over 6 per cent – this is about 30 percentage points lower than the average basic variable rate home loan.”
“The upward trend in fixed rate loan demand was evident in all states except Western Australia, where fixed rate demand fell by one percentage point.”
According to Ms Williamson, more mortgage holders are locking in the interest rate on part or all of their loan so they can structure their repayments and take better control over their finances.
“It is obvious that concerns about our domestic economy, rising utility bills and other living cost hikes along with predictions of fewer rate cuts taking place this year are having an effect on the purchasing decisions of Australians. Home loan choices are no exception,” she said.
