The latest Mortgage Choice loan data has revealed that fixed rate loans have slipped to less than 3% - the lowest level on record since the commencement of the study in February 2003.
Variable loans now represent 87% of all approvals, with basic variable up 7% to 44%. Line of credit loans slipped two per cent to 9% of all loan approvals, however the sharpest dive was experienced by fixed rate products, which fell to just 2.53% of all approvals - significantly lower than the 12 month average of 19.34% .
Mortgage Choice senior corporate affairs manager, Kristy Sheppard said, "In recent months the Australian love affair with fixed rate loans has dropped significantly. In November 2007 fixed rate loans were the loans of choice for 40% of borrowers, but by November 2008 this figure had dived to below 3%."
"Despite interest rate deductions on fixed products, borrowers are less likely to choose them at present because of further speculation on rate cuts."
The minutes from the RBA's December meeting, at which the central bank lowered rates by a further 100bps, indicated that the RBA will be on stimulus watch over the Christmas/New Year break. However economists continue to anticipate that the central bank will slash rates by a further 1% when it meets in February.
