Homeowners lock in low interest rates
Homeowners purchasing residential property across the country have shown a preference for fixed rate loans, indicating borrowers are keen to lock in low interest rates amid favourable economic conditions.
The latest loan approval figures from Mortgage Choice - Australia's largest independent mortgage broker - showed demand for fixed rate home loans has reached a six-month high, with borrowers opting for an average term of three years.
Mortgage Choice spokesperson Belinda Williamson said the results were a predictable result of the Reserve Bank of Australia's decision to slash interest rates to a low 3.25 per cent.
"Following speculation last month of fewer rate cuts to come this year, and the latest CPI data hinting at less rate activity, it comes as no surprise that borrowers are taking advantage of the good fixed rate loan offers available," Ms Williamson explained.
"By securing their interest rate they are also locking in peace of mind over the next few years."
The results showed that in October, 22 per cent of all new home loans taken out were fixed rate mortgages, slightly above the 12 month average of 21 per cent.
Three years also emerged as the most popular term for fixed rate home loans - accounting for 74 per cent of mortgages taken out in October.