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Rate cut causes spike in new mortgages

07/12/2011

Mortgage aggregator AFG reported its highest monthly sales figures in almost three years in October, when its brokers completed A$2.9 billion worth of mortgage sales. The October figures were up 18.4 per cent on the previous month.

AFG's general manager of sales and operations, Mark Hewitt, said the feedback from brokers was that the Reserve Bank's 25 basis point rate cut had stimulated demand. Another factor was very low fixed rates. Fixed rate loans made up 17.2 per cent of total mortgages sold. In the first half of the year fixed rates accounted for only six per cent of sales.

Broker Mortgage Choice also reports strong growth in the sale of fixed-rate loans. Twenty per cent of loans written by Mortgage Choice brokers in November were on fixed rates. That proportion has doubled over the past 12 months.

Source: Banking Day



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