Fixed rate mortgage loans are continuing their run of popularity as borrowers become increasingly confident of interest rate hikes sooner rather than later.
Home loan approval data from Mortgage Choice has shown an increase in fixed rate loans for the fourth month in a row.
For the month of December fixed rate loans made up 22 percent of all loans written.
Mortgage Choice CEO John Flavell spoke to Australian Broker.
“With speculation mounting that the Reserve Bank of Australia could soon lift the official cash rate, it is clear that a growing proportion of borrowers wish to beat any potential rate hikes by opting for a fixed rate home loan,” he said.
Mr Flavell said the RBA was moving towards a rate increase amid the current economic conditions and rate hikes by banks.
“Many of Australia’s lenders have already started to raise rates across their suite of home loan products.”
“In addition, the RBA has stated that the time for easing monetary policy setting has now passed.”
“All of these factors combined would suggest that a rate increase by the Reserve Bank could be right around the corner,” Mr Flavell told Australian Broker.
Victoria actually has the lowest rate of fixed rate loans in the country, less than half that of New South Wales which has the nation’s highest uptake of fixed rate loans.
With the ever-increasing possibility of RBA interest rate hikes on the horizon, Victoria is likely to see their proportion of fixed rate loans on the rise.
Talk to Perry Finance today to consider your loan options for your home loan and whether you should jump on board the fixed rate train.