One in two home loans now discounted
Discount rate mortgages are now accounting for almost half of all home loan approvals, new research has revealed.
According to the latest data from Mortgage Choice, discount rate mortgages made up 45 per cent of all approvals in September.
Fixed rates also experienced increased borrower appetite, growing to 17 per cent of all approvals.
“The real growth story at the moment is ongoing discount rates. In September 2011, this product as a proportion of all Mortgage Choice’s new home loan approvals rose for the tenth successive month,” Mortgage Choice spokesperson Kristy Sheppard said.
“Australia has almost reached the point where one in two new borrowers is seeking the combined benefit of affordability and flexibility above and beyond any other loan type advantages.
“I expect the trend to continue, bolstered by industry talk swinging away from cash rate hikes to ongoing stability or cuts.
“Many more consumers than not are willing to ride the variable rate rollercoaster at this point, especially if they feel they’ve snagged a bargain.”
Demand for standard variable and basic variable rate home loans fell in September, to 16 per cent and 15 per cent of approvals, as did that for introductory rate loans, to two per cent.