Queensland has led a rise in demand for fixed rate home loans, according to new research from Mortgage Choice.
New data showing a rise in the demand for fixed-rate home loans is "hardly surprising", according to Mortgage Choice.
The company’s national home loan approval data indicated demand for fixed rate home loans rose over the month of May, accounting for 22.47 per cent of all home loans written.
Mortgage Choice Chief Executive Officer Susan Mitchell said the trend made sense in the current climate.
“Over the last 12 months, fixed rates have accounted for 21.81 per cent of all loans written," she said.
"When you consider what has been happening in the market, the increase in demand is hardly surprising.
“Lenders on our panel have been aggressively discounting fixed rate home loan products, which has been effective in enticing more borrowers to commit to a fixed term.
“With rates as low as 3.49 per cent per annum, it’s unsurprising to see an increasing proportion of borrowers choosing to fix.”
Source: Mortgage Choice
The data revealed that fixed rate demand was highest in Queensland, where 26 per cent of borrowers opted for this type of home loan.
This was followed by Western Australia, where 25 per cent of borrowers chose to fix the interest rate on their home loan.
Borrowers in Victoria were the least likely to fix, with 15 per cent of borrowers choosing this type of product.
The most popular home loan products in May were ongoing discount Variable Rate loans followed by Basic Variable rates.
Ms Mitchell said now could be a good time for borrowers to fixing all or part of their home loan.
"Current fixed-rate loan pricing presents good value by long-term standards," she said.
“This is good news for borrowers seeking repayment certainty. In particular, for first home buyers who are looking to take advantage of government schemes and record low interest rates to enter the property market for the first time.”
“While news of low interest rates is certainly going to pique borrower interest, it’s equally important that borrowers remember the interest rate isn’t the only component of a home loan and they should look for the right loan product and features for their short and long-term needs."
“As we approach the end of the financial year, I also encourage existing borrowers to speak to their mortgage broker to get their home loan reviewed.
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