Fixed rates have continued to gain popularity among borrowers, accounting for nearly 20% of demand.
Mortgage Choice figures for October show the products grew from just over 17% in September of the company's approvals to 19.83% in October. Standard variable rate loans continued to slump, falling from 34% of approvals 11 months ago to 15.4% in October. Mortgage Choice spokesperson Kristy Sheppard said demand in the home loan market has continued to shift.
"When comparing our October loan approval data to that extracted one year ago, it’s remarkably obvious how much the industry has changed in reacting to subdued housing finance demand and a relatively positive interest rate outlook. Then, basic variable rate was the loan of choice at just over 34% of approvals. Standard variable rate followed with just under 34%, then ongoing discount rate at 17% and fixed rate at 11%," she said.
Sheppard commented that consumer demand has now "flipped", with ongoing discount rates growing to 43% of approvals, fixed rates continuing to find favour with borrowers and demand for standard variable products dwindling.
"In an environment of rising living costs and economic uncertainty it is unsurprising borrowers are taking advantage of the relatively low fixed rates and attractive variable rate discounts offered by lenders hungry for business," she said.