Fixed rate demand on the rise

According to the latest data from Mortgage Choice, fixed rate loan demand rose in February by 2.06 percentage points to reach 18.41 per cent of all new loan approvals.

However, interestingly, the demand for fixed rates varied considerably from state to state, with almost 12 percentage points separating the highest and lowest levels of demand.

Mortgage Choice spokesperson Belinda Williamson said that during the month of February, fixed rate loans were most popular in Queensland, where demand reached 23.05 per cent of all new loan approvals.

“Following the spate of natural disasters the Sunshine State has endured over the past few years, in comparison to other states it isn’t surprising to see more borrowers in Queensland choose the peace of mind offered by fixed rate loans,” she said.

“At the other end of the spectrum, Victorians were the least likely to take out a fixed rate loan in February. In fact, only 11.08 per cent of the state’s loan approvals were for fixed rates, compared to the national average of 18.41 per cent. This may suggest that Victorians are the least conservative state and are tipping further variable rate cuts to come.”

Ms Williamson went on to explain that fixed rates are not the only loan type where the states showed varying degrees of demand.

“Ongoing discount variable rate loans were the loan of choice across all states. Victoria led the charge, at 44.34 per cent of new loan approvals, followed closely by New South Wales at 43.61 per cent and Western Australia at 43.48 per cent. However, there was a considerable gap to the next state in line, Queensland, at 39.17 per cent of new loan approvals and South Australia at 38.06 per cent,” she said.