Fixed rate loans surge in popularity

Posted by Patrick Marion Date Added : 02/07/2013

Up to 20.6 percent of all new loans settled in April 2013 were fixed rate loans according to data from the Australian Bureau of Statistics (ABS). This is the highest percentage of fixed rate loans since the Reserve Bank of Australia (RBA) raised official rates to 7.25 percent in March 2008.

Lenders have been keen to secure this rising slice of the mortgage market with Bank of Melbourne leading the way with a competitive 4.95 percent fixed rate for 3 years. This trend is likely to continue while rates remain low with several surveys of borrowers indicating that they are likely to fix their home loan in the next 12 months.

This is an increase of 10% up from 23% over the last six months.