Demand for fixed rate home loans were strong in December – soaring to 33.06% – a similar level achieved back in March 2008, according to Mortgage Choice.
Fixed rate loans were significantly higher last month than the 30.56% recorded in November.
“Despite the fact that we saw several lenders raise the interest on their fixed rate products over the past few months, this type of product remains very popular with borrowers,” says Jessica Darnbrough of Mortgage Choice.
“Borrowers are increasingly flocking to the safety of fixed rate home loans as they seek to provide themselves with certainty around their mortgage repayments.
“In the current economic environment and with the Reserve Bank keeping its cards close to its chest, it is not surprising to see so many borrowers opting for the safety and security of a fixed rate home loan,” says Darnbrough.
Fixed rate loans increased in every state except New South Wales, which recorded a 0.58% drop.
Queensland recorded the biggest increase, with fixed rate loans accounting for more than 44% of all home loans in December.
However, variable rate home loans are still the most popular amongst borrowers, accounting for 66.94% of all loans in December.
This article first appeared on Property Observer.