news

Fixed rates climb in popularity

By Staff Reporter

Fixed rates are back in vogue, with new data revealing borrowers continue to flock to this type of product.

According to research from Mortgage Choice, fixed rates accounted for 22.37 per cent of all loans written in November – slightly higher than the 21.72 per cent recorded in October.

This is the fourth consecutive month of growth for fixed rates, company spokesperson Belinda Williamson said.

“Our data shows that more than one in every five new borrowers is not phased by the possibility of further variable rate cuts as early as this week, having locked in to a fixed rate loan with repayment certainty for the next year or more,” she said.

“With fixed rates at their lowest level since 2009, there are bargains on offer to both new and existing borrowers. Lenders continue to tweak their fixed rate loan pricing based on their desire for business, while factoring in their funding costs and the level of demand from borrowers.

“When investigating the option to fix part or all of your home loan’s interest rate, be sure to weigh up your options carefully as fixed rate loans have both pros and cons. Remember, the interest rate is not the only factor to consider; also compare any initial, recurring and break costs, the ability to make extra repayments and redraw, lender service and how long the loan will take to be approved.”

While many fixed rate loans are currently priced lower than variable rates, a majority of borrowers are choosing the latter.

“Despite a marginal dip in demand in November by 0.65 percentage points to 77.63 per cent, variable interest rate loans remain the top choice for Australian mortgage holders. Ongoing discount rate loans – where the rate is negotiated to a reduced amount over the loan term, usually in return for an annual fee – remained the loan of choice, accounting for 41 per cent of all new home loan approvals,” Ms Wlliamson said.

Fixed rates climb in popularity
SPI logo
Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.
Opps.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Location
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BLUE BAY 49.18%
2.
PAMBULA 43.5%
3.
BERKELEY VALE 42.74%
4.
POINT PIPER 40.52%
5.
NORTH TURRAMURRA 38.12%