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Few mortgage surprises as fixed rate demand falls

26 April 2019 Tim Neary

Demand for fixed rate home loans fell in March as borrowers react to uncertain housing market conditions, new mortgage data reveals.

Mortgage Choice’s latest national home loan approval data has revealed that demand for fixed rate home loans fell in March, accounting for 21 per cent of all mortgages written by the company and a reduction of 1.38 per cent from the month prior.

CEO Susan Mitchell said that it was unsurprising to see borrowers taking a tentative approach towards fixing their interest rate.
“There is a great deal of uncertainty surrounding the housing market at present, which could be weighing against borrowers’ decisions to commit to a fixed term,” she said.

“The outcome of the upcoming federal election carries potential policy implications that could affect people’s willingness to buy. There is also increasing speculation that the RBA will cut the official cash rate in the short term.”


She said that lenders are being particularly attentive at this time.
“Lenders would be acutely aware of borrowers’ reluctance to fix, and have in the last few weeks responded by cutting rates on some of their fixed rate products.
“Those looking to fix could enjoy great rates right now. Major lenders and smaller lenders alike are attempting to lure borrowers to their fixed rate products by announcing reductions of up to as much as 55 basis points.” 
The Mortgage Choice data revealed that fixed rate demand was highest in New South Wales, at almost 26 per cent in March.
This was followed closely by Queensland, at 24 per cent. Borrowers in Victoria were the least likely to fix their interest rate, at 14 per cent. 

The data also showed that the most popular mortgage product was the ongoing discount variable rate loan, followed by the basic variable rate loan.

Few mortgage surprises as fixed rate demand falls
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