Borrowers are choosing to stay with variable home loans in preference to fixing. According to recent sales figures by Mortgage Choice, demand for fixed rate home loans dropped to only 2 per cent of all home loan approvals in July.
According to Mortgage Choice spokesperson Kristy Sheppard new borrowers are confident that rates are not about to take off and are therefore choosing to leave their options open.
“This is despite less than half a percentage point difference between our average basic variable rate and the three year fixed rate, which converts to less than $100 per month on a $300,000 home loan,” she said.
With fixed rate home loans at a mere two per cent of all of our July home loan approvals it has now been over two years since fixed loans made up 10% of the overall mortgages taken out by home owners and investors.