Fixed rate home loans are dipping towards their lowest level in almost two years, new data from Mortgage Choice has revealed.
The national home loan approval data stated fixed rate demands dropped 22.29% in December, from November 2014’s record of 26.98%.
The results appear to support speculation that the RBA may cut rates again this year.
"At the beginning of December last year, speculation was rife that the Reserve Bank of Australia could cut the cash rate throughout 2015," Mortgage Choice spokeswoman Jessica Darnbrough said. "While future cash rate cuts are purely speculation at the moment, it would seem the chatter has been enough to encourage more home buyers to take out a variable rate mortgage."
Variable rate home loans are most preferred by homebuyers in Victoria, where they account for 85.79% of all home loans written last month. South Australia and Western Australia’s demands for variable rate products account for 82.81% and 82.11%, respectively.
Meanwhile, variable rate products in New South Wales are not so popular, accounting only 70.61% of all loans written.
"Australia's lenders are offering some very sharply priced products at the moment, so regardless of what type of home loan product you eventually decide upon, now is a good time to be a home buyer," Darnbrough said.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan