Homeowners and investors are increasingly choosing fixed rate home loans as speculation of an interest rate rise escalates, according to new data.
Mortgage Choice’s latest home loan approval figures show fixed rate mortgages accounted for 26.49 per cent of all mortgages written in April – slightly higher than the March figure of 24.22 per cent.
Mortgage Choice spokesperson Jessica Darnbrough said the swing took fixed rate product popularity back up to near-record highs.
"Demand for fixed rate mortgages increased in every state bar Queensland and South Australia,” she said. “Fixed rate demand was strongest in New South Wales, with this type of product accounting for 33.6 per cent of all loans written within the state throughout April.”
Ms Darnbrough said the return to fixed rates could be attributed to the perception the cash rate is set to rise in the coming months.
“While variable rates continue to prove more popular with borrowers, we are starting to see fixed rate demand head back to levels not seen since last year when all of the lenders were aggressively competing on price in the fixed rate arena,” she said.
Demand for these products was weakest in Victoria, where only 20.08 per cent of borrowers took out a fixed rate loan in April.