The popularity of fixed interest rate home loans in Australia has continued to fall, according to October 2009 data from Mortgage Choice.
Fixed rate loans now account for less than 3 per cent of all new loan approvals, while the demand for variable rate loans rose by two percentage points to 97 per cent for approvals.
According to Senior corporate affairs manager Kristy Sheppard, fixed rate loan demand dropped from 5 per cent of home loan approvals in September to less than 3 per cent in October, “which was unsurprising considering fixed loans can be priced up to two percentage points higher, or more, than variable loans”.
“Fixing holds little appeal to new borrowers at present,” Ms Sheppard said.
“The most popular loan types overall were basic variable, leading the way at 46 per cent of approvals, standard variable at 32 per cent, and special variable at 15 per cent.”