Fixed rate loans more popular in August

Borrowers have responded to the aggressive cutting of fixed home loan rates over the past couple of months by refinancing with “cheap” fixed rate loans.

Mortgage aggregator AFG reported yesterday that thirty-eight per cent of loans sold in August went to borrowers refinancing and 9.4 per cent of loans were on fixed terms – up from 7.9 per cent in July.

According to InfoChoice, two-year fixed home loan rates came down by an average of 25 basis points to 6.87 per cent during August.

Three-year rates fell by 27 basis points to 6.94 per cent, four-year rates fell by 33 points to 7.3 per cent, and five-year rates fell by 33 points to 7.38 per cent.

Source: Banking Day