Fixed rates are cheaper than variable rates

According to Reserve Bank figures, the average three-year fixed home loan rate is 5.45 per cent, compared with the average discounted variable home loan rate of 5.65 per cent.

Yesterday, AFG reported that fixed-rate loans accounted for 30.7 per cent of the business its brokers wrote in April. AFG's fixed-rate lending has increased from 18.7 per cent of total mortgage sales since December.

AFG's general manager of sales and operations, Mark Hewitt, said: "Borrowers are choosing to lock in historically low rates."

Source: Banking Day