The demand for fixed rate home loans has hit its highest level in more than 12 months.
According to the latest national home loan approval data from Mortgage Choice
, fixed rate home loans accounted for almost one in four (23.62%) of all loans written throughout the month of January. This is up from 19.44% recorded the month prior.
Mortgage Choice chief executive John Flavell
says this is not surprising given the market volatility.
“Home loan interest rates are incredibly volatile at the moment. Consumers are unsure whether or not Australia’s lending institutions are going to raise or cut their home loan interest rates.
“With that in mind, it is not surprising to see a growing number of borrowers looking for some safety and security around their home loan repayments in the form of a fixed rate mortgage.”
The last time demand for fixed rate home loans was this high for the franchise was back in November 2014 when there was a similar level of complexity and confusion around interest rates. Flavell says he expects demand to continue to climb this time.
“Over the coming few months, I wouldn’t be surprised to see demand for fixed rates continue to increase slightly.”
Queensland recorded the strongest demand for fixed rate products, with this type of loan accounting for 31.12% of all home loans written throughout January.
New South Wales and Western Australia were next, with fixed rate demand accounting for 24.07% and 23.15% respectively.
At the other end of the spectrum, fixed rate demand was lowest in Victoria and South Australia, with this type of product making up 13.09% and 20.03% of all loans written in each state respectively.