Speculations that the current wave of interest rate cuts have come to an end prompted a large number of property owners to lock in their mortgages.
The latest report from mortgage broker Australian Finance Group showed sales of fixed rate home loans jumped to 6.8% in April from 3.7% in the month of March and 2.5% in February.
The surge comes as some banks have already started to raise the interest rates on their fixed mortgages. In late April, CBA added 0.44% to 6.19% to its 3-year fixed rate. Westpac lifted by 0.40% to 5.79% while ING increased it by 0.20% to 5.89%.
First homebuyers remained the driving force in the market, accounting for 27.7% of all new mortgages sold in the same period. NSW recorded the highest proportion of first homebuyer loan sales at 33.8% while Victoria notched up 27.3%.
However, while the figures for April remain positive, Kevin Matthews, director with AFG said he expects the first homebuyer numbers to trend strongly downwards in coming months. "Lenders have recently amended credit policy meaning that many potential first homebuyers will no longer qualify for loans without evidence of genuine savings. The vast majority of first homebuyer loans fit this category meaning the effectiveness of the first home owner grant is diminished."
Property investors in Queensland were the most confident, snapping up 27.1% of all loans sold by AFG in the same month. NSW investors were also active, taking 26.9% of all the loans while WA racked up 25.6%.
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Collections: Mortgage News