|Borrowers choosing fixed rates|
|Thursday, 10 June 2010 00:00|
Source: Broker News - www.brokernews.com.au
An increased number of borrowers are choosing fixed rates as the cost differential between fixed and variable loans narrows.
The popularity of fixed rate home loans rose in all states except Western Australia to break the 3% barrier nationally for the first time in eight months, according to May loan approval data from Mortgage Choice.
Despite having seen a number of interest rate rises over the past several months, new borrowers continue to shy away from the more stable, less flexible loan type.
“Borrowers are still very much concerned that, at present, longer-term fixed rates are usually more expensive than variable,” spokesperson Kristy Shepherd said. “However, the cost gap is closing.”
Shepherd said it will be interesting to see whether variable rates, which currently account for almost 97% of all the listed-broker’s new home loan approvals will soon begin to experience a fall in popularity even though rates have steadied for the time being.
Source: Broker News, 10th June, 2010 - www.brokernews.com.au