By: Belinda Luc
Borrower demand for fixed rate loans has fallen once again, with variable rate loans coming out on top last month, according to a recent study by Mortgage Choice.
Despite a lift in demand for fixed rates in February, the study showed demand fell slightly in March, accounting for only 1.7 per cent of all approvals.
According to Mortgage Choice senior corporate affairs manager Kristy Sheppard, even with rising interest rates fixed rate products are not something new borrowers are enthusiastic about.
“Victoria and Queensland were the only states where fixed rate demand increased, though by less than one percentage point for each. The highest demand for fixed was in South Australia, where it was two percent of approvals,” Ms Sheppard said.
The study also showed that standard variable loan demand remained steady at 49 percent of approvals and held its position as the most popular choice for new borrowers.
“It is no wonder – there are so many quality ‘professional packages’ on offer with this type of loan,” she said.
“There are a number of terrific deals out there, not just from the major banks.”
According to the study, basic variable mortgages rose slightly to sit at 44 per cent, line of credit mortgages rose to 6 per cent ¬– up from 5 per cent in February.
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