Demand for fixed rate home loans has reached its highest levels in nearly six years, with figures climbing in almost every state in the final stages of 2013.
According to the latest data from Mortgage Choice, fixed rate home loans soared to 33.06% in December – significantly higher than the 30.56% recorded the month before.
Mortgage Choice spokesperson Jessica Darnbrough said the brokerage hadn’t seen demand for fixed rate products reach this level since March 2008.
“Despite the fact that we saw several lenders raise the interest on their fixed rate products over the past few months, this type of product remains very popular with borrowers,” she said.
“Borrowers are increasingly flocking to the safety of fixed rate home loans as they seek to provide themselves with certainty around their mortgage repayments.
“In the current economic environment and with the Reserve Bank keeping its cards close to its chest, it is not surprising to see so many borrowers opting for the safety and security of a fixed rate home loan.”
Across the country, demand for fixed rate products increased in every state bar NSW, which recorded a 0.58% drop.
At the other end of the spectrum, Queensland recorded the biggest jump in demand for fixed rates, with this type of product now accounting for more than 44% of all home loans written.
Overall, variable rate home loans continue to prove the most popular amongst borrowers, accounting for 66.94% of all home loans written in December.