Borrowers seem increasingly wary of possible rate rises, with one major mortgage broker network showing demand for fixed rate loans increased over January.
According to figures from Mortgage Choice, fixed rate home loans accounted for 23.62% of all home loans written during January, up from the 19.44% they accounted for in December.
The level of demand for fixed rate loans is the highest Mortgage Choice has seen since November 2014, with chief executive John Flavell predicting demand will continue to increase in the coming months.
“Home loan interest rates are incredibly volatile at the moment. Consumers are unsure whether or not Australia’s lending institutions are going to raise or cut their home loan interest rates," Flavell said.
“With that in mind, it is not surprising to see a growing number of borrowers looking for some safety and security around their home loan repayments in the form of a fixed rate mortgage," he said.
“Over the coming few months, I wouldn’t be surprised to see demand for fixed rates continue to increase slightly.”
Queensland was home to the highest rate of demand for fixed rate loans over January, with 31.12% of mortgages written over the month being fixed rate loans.
New South Wales and Western Australia were next, with fixed rate demand accounting for 24.07% and 23.15% respectively.
Victoria and South Australia were home to the lowest demand levels, with fixed rate loans making up 13.09% and 20.03% of all January mortgages in the two respective states.
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