The recent period of stability in interest rates has – not surprisingly – boosted the popularity of variable home loan rates.
According to the latest home loan approval figures from Mortgage Choice, variable rates accounted for 76.06% of all home loans written in March – up from 73.92% the month before.
The Reserve Bank suggested in its April board meeting the most prudent course of action for the Australian economy was a prolonged period of interest rate stability.
Mortgage Choice spokesperson Jessica Darnbrough said with the RBA
indicating rates could stay on hold for the foreseeable future, borrowers are understandably becoming increasingly comfortable taking out a variable rate mortgage.
“Moving forward, we expect demand for this type of product will continue to grow.”
Of the various variable rate products available, Darnbrough said ongoing discount rates are the most popular amongst borrowers, with this type of loan accounting for 43.71% of all home loans written throughout March.
According to Mortgage Choice data, variable products were most favoured by Victorians, with this type of home loan accounting for 81.25% of all home loans written.
Western Australia was not far behind, with variable rates accounting for 78.47% of all home loans written, while in South Australia, Queensland and New South Wales, variable rate products accounted for 77.52%, 75.05% and 73.18% respectively.
But while demand for variable rate products continues to grow across the country, fixed rates still account for almost one quarter of all loans written – almost 10% higher than the 10 year historical average.
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