Fix rate loan demand dipped over September yet still high

“While we did see a slight dip in overall demand for fixed rate products last month, the proportion of borrowers looking to fix their mortgage is still significantly higher than we have seen historically,” said Mortgage Choice CEO John Flavell.

“Traditionally, less than 25 per cent of all borrowers chose to fix part or all of their home loan. In the last six months however, the average proportion of borrowers looking to fix their rate has jumped above 25 per cent to 27.81 per cent.

“From this data, we can see that a growing proportion of borrowers are keenly searching for some surety and security when it comes to their regular mortgage repayments.”

With this month’s cash rate holding at 1.50 per cent for the 14th month in a row, the chance of a rise in the future has become more certain, according to Mr Flavell.

“The cash rate is not going to remain at this level forever and it is inevitable that the board will look to increase the current monetary policy setting at some point,” he said.

“When you combine the threat of potential rate increases with the fact that many of Australia’s lenders are currently offering some very sharp fixed rate products, it is only fair to assume that we will continue to see strong demand for fixed rate home loans.”

Queensland is the state with the highest level of fixed rate demand, which totalled 29.01 per cent for all loans across the state in September.

Next is Western Australia at 28.23 per cent, then Victoria at 28.08 per cent.

Australia-wide, variable rates are the most popular loan type at 71.67 per cent, but Mr Flavell said no matter what loan type is opted for, borrowers are in a good place due to the historically low cash rate.

"Now is a great time to be a property buyer and/or a mortgage holder. Not only are interest rates continuing to hover around record lows, but lenders continue to aggressively compete for business through sharp home loan pricing,” he said.