Fixed rate demand soars to 5-year high
The demand for fixed interest rate home loans continued to soar in April, reaching a five-year high, according to Mortgage Choice.
The national home loan approval figures show that fixed rate loans accounted for 28.04 per cent of all new home loans approved in April, an increase from 27.58 per cent from the previous month, and 18.41 per cent in February.
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This was the highest level of interest in fixed rate loans recorded since March 2008, which reached 34.87 per cent.
Mortgage Choice spokesperson, Belinda Williamson, said this result was not unexpected.
“With a number of lenders still offering highly competitive fixed rate loans, it is not surprising that borrowers have been taking advantage of the deals available and that the national percentage of fixed rate loan approvals has increased,” she said.
“What came as a surprise was that a majority of states – Queensland, South Australia and Western Australia – saw demand for fixed rate loans fall, albeit slightly. With no obvious economic factors instigating the trend, it may be a sign of growing consumer confidence.”
New South Wales saw an increased demand from 7.94 per cent to 32.45 per cent, and in Victoria saw the proportion of fixed rate loans rise by 1.28 per cent to 21.24 per cent.
However, fixed rates lost favour in other states: Queensland dropped by 6.53 per cent to 30.41 per cent, South Australia fell by 4.95 per cent to 27.31 per cent, and Western Australia dipped by 0.55 per cent to 23.70 per cent.