Australian homebuyers’ interest on fixed rates appeared to have spiked over the year as the cash rate undergoes the most aggressive hikes by the Reserve Bank of Australia in recent years.

This was one of the findings of Great Southern Bank, which analysed the top Google searches over the year.

According to the study, search terms for fixed rate home loans and fixed interest rate home loans in relation to homeownership increased 150% from last year.

Meanwhile, search terms for fixed rate home loans in terms of refinancing increased 600% on a yearly basis.

Great Southern Bank chief customer officer Megan Keleher said the year has so far been tough for Australian homeowners as they face consecutive rate hikes.

“Rising interest rates and the increased cost of living have been affecting household budgets and driven more customers to seek options to save on their home loans,” she said.

“They’re using the internet to find out how much they can borrow, how to refinance, and what support may be available for first home buyers.”

Here are the top Google queries under each search category and their growth over the past year:

About homeownership:

  1. “Interest rate rise” – 750%
  2. “RBA cash rate” – 500%
  3. “RBA interest rate” – 300%
  4. “Fixed rate home loans” – 150%
  5. “Fixed interest rate home loan” – 100%

About refinancing:

  1. “Pay calculator” – increased by more than 5,000
  2. “Borrowing capacity calculator” – more than +5000%
  3. “Fixed rate home loans” – +600% YoY
  4. “Borrowing power calculator – +190% YoY
  5. “LMI calculator” – +120% YoY

Mortgage enquiries down amid rate rises

Despite the increased interest in fixed rates, borrowers seemed to have taken the wait-and-see approach before engaging with lenders, particularly over the second quarter of the year, which covers the first two rate rises.

An analysis from Experian revealed that the number of mortgage applications dropped by more than 10% in the second quarter of 2022 vs the same period for the previous year.

Experian director of client advisory Charlotte Rankin said mortgage enquiries soared in the second year of the pandemic as many Australian households found themselves with more disposable income due to lockdown-induced bars on travel and dining out.

“However, analysis of our bureau data tells us that monthly mortgage enquiries have tapered off this year from the highs of 2021,” she said.

Ms Rankin said declining mortgage enquiries is an ongoing pattern as rate hikes continue.

“There are many factors contributing to this, including: overall property market corrections across Australia’s major cities, significant cost of living increases driven by global inflation, as well as ongoing interest rate rises with the average Australian household facing increases of almost $1,000 to their monthly mortgage repayments by the end of the year.”

Photo by Umnat Seebuaphan's Images on Canva.