Fixed rates increase as speculation of rate rise continues: Mortgage Choice
The Reserve Bank will meet again next week to determine whether they will move the interest rate, and with discussions that the next move will be an increase it appears fixing is back in favour, according to Mortgage Choice spokesperson Jessica Darnbrough.
Mortgage Choice's latest home loan approval figures saw fixed rate mortgages totalling 26.49% of all mortgages written through April. This was an increase, albeit modest, on March.
"Last month, fixed rates accounted for 24.22% of all mortgages written," said Darnbrough.
"This month, fixed rate demand swung back towards near record highs as more borrowers opted for this type of mortgage product."
Demand for these mortgages increased in every state across Australia, apart from Queensland and South Australia, while New South Wales recorded the strongest demand for this product, at 33.6%.
"While variable rates continue to prove more popular with borrowers, we are starting to see fixed rate demand head back to levels not seen since last year when all of the lenders were aggressively competing on price in the fixed rate arena," she said.
Ongoing discount rates continue to be the most popular product - accounting for 43.19% of all loans written, and up to 51.89% in Western Australia.
"Regardless of whether borrowers choose a fixed or variable rate mortgage, they will no doubt secure themselves a sharp rate. Interest rates continue to hover around record lows and lenders are still competing on price for market share. With that in mind, it is fair to say that potential borrowers who are keen to buy and have the ability to do so, now may be a good time for them to get onto the property ladder," she concluded.
