Fixed rate demand spikes again in April
Fixed rate demand spikes again in April
Posted on Thursday, May 01 2014 at 11:03 AM
With speculation rife the next move by the Reserve Bank of Australia could be an interest rate rise, an increasing number of borrowers are opting to fix their mortgage, according to new data.
Mortgage Choice’s latest home loan approval
figures found fixed rate mortgages accounted for 26.49 per cent of all
mortgages written through April – a modest lift on the month before.
“Last month, fixed rates accounted for 24.22 per
cent of all mortgages written,” Mortgage Choice spokesperson Jessica Darnbrough
said.
“This month, fixed rate demand swung back
towards near record highs as more borrowers opted for this type of mortgage
product.
“Demand for fixed rate mortgages increased in
every state bar Queensland and South Australia. Fixed rate demand was strongest
in New south Wales, with this type of product account for 33.60 per cent of all
loans written within the state throughout April.”
With speculation intensifying that the Reserve
Bank could be set to lift the official cash rate in the coming months, Ms
Darnbrough said it wasn’t surprising to see a small lift in the number of
borrowers choosing to fix their mortgage.
“While variable rates continue to prove more
popular with borrowers, we are starting to see fixed rate demand head back to
levels not seen since last year when all of the lenders were aggressively
competing on price in the fixed rate arena,” she said.
Overall, ongoing discount rates proved the most
popular with borrowers, with this type of product accounting for 43.19 per cent
of all loans written.
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