The overall demand for fixed rate home loans continued to climb in April, reaching five-year highs, according to national home loan approval figures from Mortgage Choice.
The preference for fixed rate loans accounted for 28.04% of all new home loans approved in April, showing an increase in demand for this loan type from 27.58% in March and 18.41% in February - the highest level of interest in fixed rate loans since March 2008, when demand reached 34.87%.
From a state-based perspective, both New South Wales and Victoria saw an increase in fixed rate appetite. Demand for the more conservative loan type in NSW rose by 7.94 percentage points to 32.45%, the highest of any state. At the same time, Victoria saw the proportion of fixed rate loans rise by 1.28 percentage points to 21.24%.
However, fixed rates lost favour across the remaining states; Queensland saw demand drop by 6.53 percentage points to 30.41%, South Australia fell by 4.95 percentage points to 27.31% and Western Australia dipped by 0.55 of one percentage point to 23.70%.
Mortgage Choice spokesperson, Belinda Williamson, says that with a number of lenders still offering highly competitive fixed rate loans, it’s not surprising that borrowers have been taking advantage of the deals available and that the national percentage of fixed rate loan approvals has increased.
“What came as a surprise was that the majority of states – Queensland, South Australia and Western Australia – saw demand for fixed rate loans fall, albeit slightly. With no obvious economic factors instigating the trend, it may be a sign of growing consumer confidence. Time will tell.”