New research by Mortgage Choice has revealed that fixed-rate home loan demand is continuing to rise.
According to the group’s latest national home loan approval data, fixed-rate home loans accounted for 19.44 per cent of all loans written throughout December – an increase from 17.39 per cent the month prior.
Mortgage Choice chief executive officer John Flavell said it’s not a surprise to see a rise in fixed-rate home loan demand for the second consecutive month.
“This spike in demand for fixed-rates comes just months after the majority of Australia’s lenders lifted the interest rates across their suite of variable rate home loans,” he said.
“A lot of mortgage holders are now acutely aware that Australia’s banks can and will lift their variable-rates as they see fit. As such, it isn’t surprising to see an increasing number of Australians opting for the security of a fixed rate home loan.
“Moving forward, and depending on what the Reserve Bank does with the official cash rate next month, I wouldn’t be surprised to see an increasing number of Australians looking to fix part or all of their mortgage.”
On a state-by-state basis, fixed-rate home loan demand was highest in New South Wales, with this type of product accounting for 25.35 per cent of all loans written.
Following this was South Australia and Queensland, with fixed-rate products accounting for 20.25 per cent and 19.13 per cent, respectively.
Fixed-rate demand was lowest in Victoria, with this type of product accounting for 10.65 per cent of all loans written in December.
Of the variable-rate products, ongoing discount rates continue to be the most popular among mortgage holders, with this type of product accounting for 52.07 per cent of all loans written in December.
Introductory rate products were once again the least popular at 0.24 per cent – down from 0.45 per cent in November.