Borrowers are banking on further declines in interest rates, with fixed rate demand dropping to its lowest level in nearly two years.
According to new data from Mortgage Choice, fixed rate home loans accounted for just 22.29% of all loans written by the franchise brokerage in December. The result was down significantly from 26.98% in November, and was the lowest proportion of fixed rate home loans in 22 months.
Mortgage Choice spokesperson Jessica Darnbrough said speculation that the RBA
could trim the cash rate further in the coming months has fuelled variable rate demand.
“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,” she said.
Darnbrough said both variable and fixed rates remained at competitive levels.
“Australia’s lenders are offering some very sharply priced products at the moment, so regardless of what type of home loan product you eventually decide upon, now is a good time to be a home buyer,” she said.