Fixed rates 0.70 per cent cheaper than variable

Demand for fixed rate loans continues to build despite the near-certainty of an RBA cut next week.

Data from Loan Market has shown a significant increase in demand for fixed rate loans over the past month. The company has put the rise down to banks' decisions to move independently of the RBA.

“Loan Market has seen demand for fixed rates increase by 15% in the past month in a clear sign that consumers are mindful the banks may keep raising their variable rates irrespective of RBA rate decisions,” a company spokesman said.

“The spread between variable and fixed rates is getting wider and is as much as 70bps for your average three-year fixed rate mortgage,” he said.

Source: Broker News