The return in fixed rate demand might be indirectly caused by the out-of-cycle rate hikes implemented by most of Australia’s lenders on their variable rate home loan products, suggested Mortgage Choice chief executive officer John Flavell.
“As a result of those rate hikes, an increasing number of new buyers are looking to fix at least part of their mortgage as they seek out security and surety around their mortgage repayments,” Flavell explained.
According to the report, NSW had the strongest demand for fixed rate home loans among the states. Demand for the product accounted for 24.59% of all loans written in NSW.
Following NSW, Western Australia’s fixed rate demand was at 16.81%, and Queensland was 15.83%.
On the other hand, Victoria and South Australia both had the lowest demand for fixed rate products, at 8.89% and 12.37% respectively.
Despite the improvement in fixed rate home loan demand in four of the five states, variable rate products still remain popular among consumers, accounting for 51.78% of all loans written throughout the month of November.
Flavell anticipates greater demand for fixed rate home loans in the near future.
“Australia’s lenders made it clear in October when they raised their rates that additional rate hikes could be on the cards. In order to avoid any future rate hikes and obtain some surety around their mortgage repayments, I believe we will see more Australians locking into a fixed rate home loan.”
He also added that while interest rates will likely rise in the months to come, the mortgage market is still very competitive as it is.
Collections: Mortgage News