Fixed rate loans gaining popularity
The proportion of borrowers choosing fixed rate mortgage loans has risen to more than 10 per cent, according to data published by big mortgage broking chain AFG. While AFG reports that the total number of loans sold in 2010 was down 10 per cent, the proportion of fixed rate loans went up.
The AFG figures showed that fixed-rate mortgages made up only 2 per cent of all mortgages in December 2009. As of last month, this figure had risen to 12.6 per cent.
AFG's Mark Hewitt said last year was challenging because of "interest rate rises, issues with competition and fears surrounding the mining tax". But Mr Hewitt said he believed there would be a greater level of activity in the market this year, partly driven by competition from the smaller lenders.
Source: The Australian