Demand drops for fixed-interest loans
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Demand drops for fixed-interest loans
Posted on Wednesday, January 07 2015 at 1:38 PM
Data released by mortgage broker Mortgage Choice shows demand for fixed-interest rate loans has fallen to a 22-month low.
The
analysis revealed fixed loans accounted for 22.29 per cent of total loans in
December 2014, down from 26.98 per cent in the previous month.
Jessica Darnbrough, spokesperson for Mortgage
Choice, says recent speculation of a potential interest rate cut in 2015 has
seen borrowers opting towards variable rate loans.
“At the beginning of December last year,
speculation was rife that the Reserve Bank of Australia could cut the cash rate
throughout 2015.”
With the Australian and global economies
remaining weak, some analysts are changing their cash rate forecasts to include
up to two further cuts this year, according to Darnbrough.
“While future cash rate cuts are purely
speculation at the moment, it would seem the chatter has been enough to
encourage more homebuyers to take out a variable rate mortgage.”
On a state-by-state basis, variable loan were most
popular in Victoria, with South Australia and Western Australia not far behind.
Variable rates were least popular in New South
Wales.
Darnbrough says regardless of the loan type,
lenders continue to be competitive.
“Australia’s lenders are offering some very
sharply priced products at the moment, so regardless of what type of home loan
product you eventually decide upon, now is a good time to be a homebuyer.”
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