Demand for fixed rate home loans dropped in February as the Reserve Bank continues to maintain its easing bias.
According to data from Mortgage Choice
, fixed rate home loans accounted for 22.28% of all loans written in February, down 1.34% from the 23.62% written the month prior.
Mortgage Choice chief executive John Flavell says he wouldn’t be surprised to see demand for fixed rate products start to taper off.
“Given the Reserve Bank of Australia has indicated that they won’t hesitate to cut rates again if the need arises, borrowers may be encouraged to take out variable rate home loans and take full advantage of the current low interest environment.”
Demand for fixed rate products was highest in New South Wales, with this type of loan accounting for 28.42% of all home loans written throughout February.
This was followed by Queensland and South Australia, where fixed rate demand accounted for 23.64% and 17.29% of loans respectively.
Meanwhile, in Victoria and Western Australia fixed rate loans accounted for just 16.92% and 13.23% of all loans written in each state respectively.
Variable rate home loans still remain the most popular with borrowers, with 77.72% opting for a variable rate mortgage in February.