"It is interesting that since October 2005 standard variable rate approvals have averaged around 35% of all approvals nationwide. This continued product preference occurred in spite of the May 2006 interest rate increase, as well as speculation about imminent rate rise in August and the strong call to borrowers to fix their home loan interest rates," says Warren O'Rourke, Mortgage Choice national corporate affairs manager. Economists say the rationale for fixing is not that compelling because the rates for fixed term loans are not that attractive compared to the standard variable rates. "Although fixed rates are now below variable rates which is unusual, they are not as much below variable rates as they were a year ago. While rates are going up in the short term, I suspect that in two years time they're going to start coming down again, so people should not lock themselves in beyond that point," says Saul Eslake, ANZ chief economist.

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