Fixed rate loans push forward over December

By |
More data has pointed to a resurgence in the popularity of fixed rate home loans, a trend that is predicted to continue during 2016.

National lending figures released this week by Mortgage Choice have revealed that during December fixed rate loans accounted for 19.44% of all home loans written during the month.

That figure represents a month-on-month increase from November, when fixed rate loans accounted for 17.39% of all loans and is the second straight month fixed rate loans have increased their market share.

Mortgage Choice chief executive John Flavell said the increase in fixed rate loans was hardly unexpected given the recent interest rate rises levied by many Australian lenders.

“This spike in demand for fixed rates comes just months after the majority of Australia’s lenders lifted the interest rates across their suite of variable rate home loans,” Flavell said.

“A lot of mortgage holders are now acutely aware that Australia’s banks can and will lift their variable rates as they see fit. As such, it isn’t surprising to see an increasing number of Australians opting for the security of a fixed rate home loan,” he said.

According to Mortgage Choice, fixed rate home loans are at their most popular in New South Wales, where they accounted for 25.35% of all loans, followed by South Australia (20.25%) and Queensland (19.13%).

Fixed rate loans have their lowest market share in Victoria, accounting for just 10.65% of loans written over December.

With the Reserve Bank of Australia set to hold their first board meeting for the 2016 calendar year in February, Flavell said that could have a huge impact on the future of fixed rate home loans in the coming year.

“Moving forward, and depending on what the Reserve Bank does with the official cash rate next month, I wouldn’t be surprised to see an increasing number of Australians looking to fix part or all of their mortgage,” he said.

Flavell isn’t the only one who can see fixed rate loans becoming more prominent in 2016, Australian Finance Group general manager sales and operations Mark Hewitt made a similar prediction this earlier this week.

“As foreshadowed by AFG’s Competition Index late last month, the number of people keen to fix their loans is on the rise,” Hewitt said.

“A long period of low interest rates has many people predicting an upward swing may be on its way in 2016.”

Hewitt’s comments came after AFG reported a 3.2% increase in the number of fixed rate loans it wrote over the December quarter.
 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Top Suburbs : belmont , wiley park , wallsend , spearwood , scarborough

go back

Get help financing your investment



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here