Demand for fixed rate home loans has continued to rise with these types of loan accounting for almost one in five loans written in December.
Fixed rate home loans accounted for 19.44% of all loans written throughout the month of December, according to national data from mortgage franchise Mortgage Choice
. This is up from 17.39% recorded in November.
Mortgage Choice chief executive officer John Flavell said this was the second consecutive month that fixed rate demand had increased.
“This spike in demand for fixed rates comes just months after the majority of Australia’s lenders lifted the interest rates across their suite of variable rate home loans.
“A lot of mortgage holders are now acutely aware that Australia’s banks can and will lift their variable rates as they see fit. As such, it isn’t surprising to see an increasing number of Australians opting for the security of a fixed rate home loan.”
Across the country, demand for fixed rate home loans was highest in New South Wales, with this type of product accounting for 25.35% of all loans written.
This was followed by South Australia and Queensland, where fixed rate products accounted for 20.25% and 19.13% respectively.
At the other end of the spectrum, fixed rate demand was lowest in Victoria, with this type of loan accounting for 10.65% of all loans written in the month of December.
Flavell said he expects the increased demand for fixed rates will continue.
“Moving forward, and depending on what the Reserve Bank does with the official cash rate next month, I wouldn’t be surprised to see an increasing number of Australians looking to fix part or all of their mortgage.”
Australian Finance Group
(AFG) also reported a lift in demand for fixed loans in the quarter to December. In its Mortgage Index released this week, the group saw fixed rate lending lift by nearly 3% to 14.2% of the product mix. This figure, as a percentage of AFG’s overall volume saw its first increase since the final quarter of 2013.