Home buyers still prefer to take the gamble, with data from a major franchise revealing borrowers are increasingly favouring variable or split loans over fixed rates.
The number of fixed rate loans taken out by Aussie
’s customers fell by almost 5% to 12% of loans in November 2014, compared with November 2013.
founder John Symond
says he expects this trend to continue into 2015 amidst speculation the Reserve Bank may lower the cash rate further in the New Year.
“Our customers are being savvy and hedging their bets on interest rates. They’re wanting to take advantage of a competitive mortgage market and despite no cash rate changes in 16 months, lenders are continuing their moves toward lower interest rates,” he said.
“Customers who want the best of both worlds are splitting their home loan into fixed and variable portions. Fixed rates give certainty about repayments, ideal for tight budgets, while also protecting against possible rate rises in the years ahead. Variable rates give flexibility to take advantage of the current low rates by making additional repayments to pay down their mortgage and the benefit of any further rate drops.”
This data is in contrast to data released by comparison website finder.com.au yesterday, which revealed the proportion of borrowers fixing their home loan through the site reached its highest level in over three years – suggesting that home buyers are still concerned about rising interest rates.
However, despite the conflicting data on fixed rate mortgages, both sets of data highlight that the current market is offering great opportunities for home buyers to secure a highly competitive rate.