Fixed rate loans soar as banks go around in circles

Mortgage Choice data shows demand for fixed rate loans is increasing, with the type of loan increasing 6% in September for all loans taken out to almost 24%; the highest fixed percentage rates are since december 2017.

Looking state by state, fixed rate mortgages were most popular in Queensland with 26.47% of all loans, while they were least popular in Victoria with 16.67% of all loans. ready.

Breaking the data down between homeowner and investor loans, fixed rate investor loans for homeowners rose from just over 5% to 20%, while investor loans increased by 1% at 33%.

Although this is a lower figure, fixed rate loans have steadily increased over the past three months, rising from 31% in June, 32% in August and 33% in September.

Regarding the growing demand, Mortgage Choice CEO Susan Mitchell said this demand was anticipated due to the current loan market.

“The September data is not surprising when you consider the recent rate hikes on variable rate mortgage products announced by three of the Big Four banks. This would undoubtedly encourage more borrowers to repair, ”Ms. Mitchell said.

“History has shown that when the majors increase their rates, small lenders quickly offer competitive prices on their own products to attract borrowers looking for a better deal.

“However, we have seen limited market movement due to a combination of factors such as the regulatory environment and increasing wholesale funding costs that would undoubtedly affect smaller lenders.”

As mortgage interest rates seem likely to rise further, Mitchell advised borrowers to consider repairing some or all of their loan to protect against further rate hikes.

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Fixed rate loans soar as banks go in circles

Last updated: November 13, 2018

Posted: 09 October 2018