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Brokers across Australia are writing significantly fewer fixed-rate loans today than a year ago, according to new research.
AFG revealed that 14.5 per cent of its December mortgages were fixed, compared to 18.5 per cent the year before.
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Mortgage Choice has reported an even sharper drop, with its fixed-rate share falling from 33.1 per cent in December 2013 to 22.3 per cent in December 2014.
That is the lowest level since February 2013, according to the group.
Mortgage Choice spokesperson Jessica Darnbrough said it is not surprising to see an increasing number of borrowers opting for a variable-rate home loan.
“At the beginning of December [2014], speculation was rife that the Reserve Bank of Australia could cut the cash rate throughout 2015,” Ms Darnbrough said.
“Ongoing weakness in the Australian and global economy has encouraged some analysts to change their cash rate forecasts to include up to two further rate cuts.
“While future cash rate cuts are purely speculation at the moment, it would seem the chatter has been enough to encourage more home buyers to take out a variable-rate mortgage.”
[Related: Interest rates about to fall, says leading analyst]
