Std variable still king but fixed more popular

08/09/2010

The overall AFG figures show a reversal of the declining mortgage sales trend in May, June and July. AFG brokers wrote a total of 6269 loans in August, up from 5698 in July. The value of those loans was $2.3 billion, up from $2.1 billion in July. The average loan size was $373,750. The average loan to valuation ratio was 63 per cent, up a little from 62.4 per cent in July but consistent with the trend this year.

Once again the attractive fixed rate deals in the market, with three-year rates close to variable rates, failed to attract borrowers. Fixed rate loans accounted for 3.9 per cent of the total mortgages sold in August, up slightly from 3.4 per cent in July, according to leading broking group AFG.

Yesterday AMP Bank dropped its basic variable rate for new customers by 13 basis points to 6.54 per cent. AMP is also offering a three-year basic fixed rate loan at 6.99 per cent. The most popular loan was the standard variable, which made up 60.8 per cent of the total, followed by basic variable (16.8 per cent), home equity (10.2 per cent), introductory rate loans (8.2 per cent) and fixed.

Source: Banking Day