Fixed rate demand soars

Staff Reporter

The take up of fixed rate home loans more than doubled over October to reach a 27-month high of 7.7 per cent, new research has found.

According to Mortgage Choice data, this level of demand was well ahead of the national six-month average of 3.7 per cent and the 12-month average of 2.7 per cent.

The popularity of this more conservative type of loan rose in every state during the month. Queensland experienced the most take up, at 9.2 per cent, and South Australia the least, at 4.0 per cent.

“The demand for fixed rate home loans increased substantially across Australia in October, by over four percentage points to 7.7 per cent of all our new home loan approvals. This was the highest level seen since July 2008,” Mortgage Choice spokesperson Kristy Sheppard said.

“One major reason was the introduction by each of two smaller lenders on our panel of a well-rounded fixed rate home loan. Both products had a low interest rate and agreeable features. A number of borrowers who were considering taking out a fixed rate loan jumped on one of the deals when presented with them, in the face of much talk around upcoming rate rises.”