The fierce competition between Australia’s lenders has ultimately brought fixed rate home loans back en vogue.
According to the latest Mortgage Index by AFG, a mortgage broker aggregator that says it handles around 10 per cent of loan transactions in Australia, demand for fixed rate home loans hit a four year high in September.
AFG reported that 21.5 per cent of all new borrowers chose to lock in rates last month, with three year fixed loans being particularly popular.
The last time that fixed rate loans were so popular was in March 2008, when 24 per cent of borrowers chose to lock in rates.
The increasing popularity of fixed rate home loans is unsurprising given that almost all of Australia’s lenders have cut the interest on their suite of fixed rate products in recent months.
Just last week, Suncorp Bank came to the game with a market leading three year fixed rate of 5.48 per cent.
Similarly, Citibank trimmed 35 basis points from its five year rate to take it to just 5.89 per cent.