Fixed rate demand on the rise
In the face of last month’s predictions about interest rate rises, the take up of fixed rate home loans has reached a two-year high in October, according to the mortgage broker Mortgage Choice.
The demand for fixed rate home loans more than doubled over October to 7.7 per cent, with Queensland experiencing the most take up at 9.2 per cent, and South Australia the least at 4 per cent.
“The interest rate on these loans has now risen and we’re yet to see any new fixed term products that match the original offers in terms of both pricing and quality, so fixed rate demand may drop a little this month,” said Mortgage Choice spokesperson, Kristy Sheppard.
“Another factor would be that the average three and five-year fixed rates remain higher that the average standard variable and basic variable rates,” Sheppard said.
However, Sheppard said the expected drop might be offset by a probable increase in borrowers’ predilection towards fixed rates due to November’s cash rate rise and the subsequent lender rate rises.
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