WA leads the way for fixed rate home loans

DEMAND for fixed rate home loans is increasing, with one lender reporting this type of loan accounted for nearly one in four of the home loans they wrote in March.

According to Mortgage Choice’s latest national home loan approval data, fixed rate home loans accounted for 23.15 per cent of all their loans for the month, up 0.87 per cent from the 22.28 per cent recorded in February.

Demand for fixed rate home loans was highest in WA, accounting for 26.91 per cent of all loans written.

In NSW, fixed rate home loans accounted for 26.4 per cent of all loans written, while Victoria had the lowest demand at 12.7 per cent.

Despite the small lift in fixed rate demand across the country, variable rate home loans – specifically ongoing discount products – continued to prove the most popular with Mortgage Choice borrowers.

In NSW, ongoing discount products accounted for 51.28 per cent of all loans written throughout the month.

This figure was 37.71 per cent in WA.

Mortgage Choice chief executive officer John Flavell said ongoing discount home loans would always prove popular because borrowers wanted a competitive interest rate.

“Variable rate loans will no doubt remain the most popular product with borrowers for years to come as it allows them to take advantage of rate reductions when they occur,” he said.

“That said, given that the interest rate market is incredibly volatile, I would expect to see more borrowers looking to lock in at least part of their mortgage.”