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‘Concerned’ borrowers turning to fixed rates

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Reporter 5 minute read

Mortgage holders are increasingly opting for fixed rates amid out-of-cycle variable interest rate rises, according to the latest data from Mortgage Choice.

Mortgage Choice’s latest national home loan approval data has revealed that demand for fixed rate home loans rose in October, accounting for over 24 per cent of all loans written, an increase of over 3 per cent on the 12-month average.

CEO of Mortgage Choice Susan Mitchell attributed the rise to growing concerns over variable mortgage rate increases.

“Demand for fixed rate home loans has been growing over the last few months and a number of factors could see this trend continue over the medium term,” Ms Mitchell said.

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“Rising variable interest rates would be worrying borrowers across the country who now seem to be making the switch to a fixed rate loan.

“These borrowers, who may be concerned about rising interest rates, would be looking to secure repayment certainty in what seems like an uncertain period for home loan interest rates.”

The data also revealed that on a state-by-state basis, borrowers in New South Wales were the most likely to fix their interest rate, with almost 30 per cent opting for a fixed rate home loan, a rise of almost 4 per cent on the month prior, followed by South Australia (27.5 per cent), Western Australia (24.4 per cent), Queensland (23.7 per cent) and Victoria (15.3 per cent).

Ms Mitchell urged borrowers to review their home loan to ensure that they’re saving money on their repayments.

“I cannot stress enough how important it is for borrowers who have not had their home loan reviewed in the last 12 months to do so as soon as possible,” the CEO said.

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“Complacency could be preventing them from saving money on their repayments each month and, potentially, paying down their loan quicker. An appointment to get a home loan health check could take as little as an hour.”

Ms Mitchell concluded: “In this current environment, it has never been more important to ensure you are seeking expert advice and getting a home loan health check at least twice a year.

“Lenders’ policies and preferences are constantly changing, which means if you don’t play an active role in the future of your home loan, you could get left behind.

“Looking ahead, borrowers feeling the sting of recent rate rises may want to consider fixing part or all of their home loan after seeking the guidance of a qualified mortgage professional.”

[Related: Fixed rate demand rises by 6% in September]

‘Concerned’ borrowers turning to fixed rates
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