Despite widespread speculation to suggest the Reserve Bank will keep rates on hold when the board meets tomorrow, it seems buyers feel safer locking in at a fixed rate.
New data from Mortgage Choice found the popularity of fixed rates hit their highest level in June, reaching 12.3 per cent.
Every state apart from SA saw a rise in appetite for fixed rate loans. The largest increase in interest came from WA, where demand rose from 9.4 per cent in May to 14.2 per cent in June.
Mortgage Choice spokesperson Kristy Sheppard said the constant speculation about interest rate rises in the latter half of 2011 has convinced a higher number of borrowers to simply lock in their rate.
“July’s figures will be interesting because over the past month we’ve seen several lenders reduce their fixed rates on home loans. Now, there’s one tenth of a percentage point between the average three-year fixed rate, traditionally the most popular with borrowers, and the average basic variable rate. We haven’t seen that close a comparison in some time,” Ms Sheppard said.
“Of course, there’s still a range of good ongoing discount rate home loan deals on the table at present, hence the overriding popularity of that more flexible product type.”