Demand for fixed rate home loans has seen a record-drop in almost two years, as the industry widely speculates the official cash rate to be cut even more significantly this year.
The latest national home loan approval data from Mortgage Choice shows fixed rate home loans are only occupying 20.55% of the mortgage market share in the last month. This figure is the deepest fall fixed rate home loans ever encountered, following the 21% dip in February 2013.
“Of course, given that many analysts are now predicting that the Reserve Bank of Australia will cut the cash rate in the not-too-distant future, it is unsurprising to see demand for fixed rate home loans decreasing and an increasing number of borrowers opting for a variable rate home loan,” spokesperson Jessica Darnbrough said.
Variable rates with ongoing discounts are the most popular home loans in the market today, as they accounts for 44.36% of all loans written in Australia.
Overall, the majority of homebuyers in Australia prefer variable rates, as they have now reached a share of 84.78% of all loans written. Specifically, Western Australia and South Australia are particularly fond of variable rates, with 91.96% and 80.92%, respectively.
New South Wales recorded the lowest demand for variable rates, with 76.38% of all loans written in January.
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