Westpac forecasts higher interests rates: Borrowers warned to brace for higher repayments
Monthly repayments could soon cost borrowers a lot more cash if Westpac’s predictions for rate rises do come to fruit...
Fixed home loan demand has reached a 31 month high, new figures have revealed.
According to recent data from Mortgage Choice, appetite for fixed rate home loans soared for the third consecutive month in December 2010, with every state observing a lift in demand despite the continued rising cost of fixed rates.
Mortgage Choice spokesperson Kristy Sheppard said 15.2 per cent of the company’s loan approvals in December were fixed rates, despite the cash rate being much lower now than back then.
“Fixed term loan approvals rose four percentage points over the month to more than double the six month average of 7.1 per cent and more than triple the 12-month average of 4.6 per cent,” she said.
“Much is being written about the cautious attitude of Australians and our latest data reflects that. Many mortgage holders are locking in the interest rate on part or all of their loan so they can better control their ability to meet repayments.
“It’s obvious that concerns about utility bills and other living cost hikes along with predicted rate rises for 2011 are having a noticeable effect on the purchase decisions of new borrowers. Home loan commitments are no exception.”
However, standard variable rate loans continue to hold relatively steady as the favoured home loan type, at 32.9 per cent of approvals, followed by basic variable loans at 25.1 per cent and ongoing discount loans at 21.2 per cent.