More borrowers choosing fixed rates

06/01/2012

According to new data from Mortgage Choice, fixed rate loans accounted for 24 per cent of all new home loan approvals during December 2011, up from 21 per cent in November and well above the 12-month average of 15 per cent. Demand for fixed rates has risen for seven consecutive months, increasing 13 percentage points since May 2011.

"Consecutive cash rate cuts in November and December 2011 have not swayed Australian borrowerss' desire for fixed rate loans," Mortgage Choice spokesperson Belinda Williamson said.

"During December fixed rates were significantly lower than variable rates, in some cases the difference was one percentage point or more. Customer demand for variable rate loans fell from 79 per cent to 76 per cent, well down on the 12-month average of 85 per cent. The most popular variable rate home loan with new borrowers, ongoing discount rate loans, slipped from 44 per cent to 41 per cent, also above the 12-month average of 35 per cent."

Source: The Adviser