Current internal data from Mortgage Choice shows that the borrower demand for fixed rates rose in September, accompanying the out-of-cycle interest rate hikes from conventional banks.
The data show an increase of 6 per cent, from 18 to 24 per cent in the month of September. That is the highest it has been since December of 2017.
This research discovered that according to a state-by-state basis, home loan borrowers in Queensland preferred a fixed rate mortgage of 26.4 per cent over other options. That is a bit higher than borrowers from NSW at 26.2 per cent, South Australia at 23.8 per cent, Western Australia at 19.3 per cent, and Victoria at 16.6 per cent.
Susan Mitchell, CEO of Mortgage Choice, said that this shift in the borrower demand for fixed rates is induced from the current out-of-cycle interest rate changes. She said, “September’s data is unsurprising when you consider the recent rate hikes to variable rate home loan products announced by three of the big four major banks. This would no doubt be encouraging more borrowers to fix”.
Ms Mitchel continued, “History has shown that when the majors lift their rates, smaller lenders are quick to offer competitive pricing on their own products in order to attract borrowers in search of a better deal. However, we have seen limited market movement due to a combination of factors such as the regulatory environment and increasing wholesale funding costs, which would no doubt be affecting smaller lenders. Institutions across the country have become more selective about the customers they lend to, vying for borrowers in a healthy financial position. Indeed, lenders are seeking high-quality borrowers who present low risk.”
She motivated borrowers to evaluate their current home loans due to the mortgage market’s recent changes. “This highlights the need for borrowers to review their current home loan and financial situation with the help of a qualified mortgage professional and financial advisor to ensure they are best placed to secure a competitive deal when they choose to switch to loan providers,” declared the CEO.
When was the last time you reviewed your home loan? This may be a good time to consider Ms Mitchell’s advice.