More people fixing home loans
New data reveals that more people are fixing their home loans, as borrowers are confused and feel uncertain about the future of interest rates, according to Mortgage Choice.
The mortgage broker said national fixed-home loan approvals accounted for over 24.41 per cent of home loans in April, up from the prior month of 23.15 per cent.
The chief executive of the listed company, John Flavell, said given the current level of interest rate volatility, more borrowers would "lock in at least part of their mortgage".
He said it was because some economists predicted rates would fall in the near future, while others said rates would rise, which left borrowers understandably confused.
While the Reserve Bank of Australia could cut official cash rates in the near future, it does not mean that lenders will pass it on to customers, he said.
"We've seen many of Australia's lenders increase their rates out of cycle with the Reserve bank. So while the cash rate may fall, interest rates may not," Flavell said.
According to their data, borrowers in Western Australia and Queensland were using fixed rate loans the most (27 per cent of loans in April).
Meanwhile, Mortgage Choice said Victorians had the lowest amount of fixed home loans (accounting for 15.48 per cent of national loans).
In New South Wales 26 per cent of loans were fixed, while 23 per cent were fixed in South Australia.
Depsite that, the most popular national product was the variable home loan, as mortgagors could take advantage of rate reductions, Flavell said.
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