A wave of fixed rate cuts seems to have done little to sway borrowers, as demand for fixed rates has dropped.
According to new data from Mortgage Choice, fixed rate demand dropped slightly in July. Demand for the products fell to 23.95% from 24.66%. But Mortgage Choice spokesperson Jessica Darnbrough said that recent cuts to fixed rates may not yeat have filtered through to demand.
“Over the last few weeks, several of Australia’s lenders have slashed the interest on their suite of fixed rate products, taking their home loan rates to new historical lows. At present, three of the four majors are offering five-year fixed rate mortgages with an interest rate of just 4.99% – which is largely unheard of. With this in mind, it wouldn’t be a surprise to see fixed rate activity lift over August as borrowers opt to lock their mortgage in at the historically low rate and provide themselves with some certainty around their mortgage repayments for a specific time period,” she said.
Variable rates accounted for 76.05% of the market, with ongoing discount rates proving the most popular at 43.49%. Fixed rates were most popular in Queensland, accounting for 28.02% of all loans, whereas variable rates saw the highest uptake in South Australia, at 83.16%.