In the wake of natural disasters, nearly one in four Queenslander’s are now fixing their home loan rate, while nationally demand for cheaper fixed-rate home loans is also rising, according to a prominent mortgage manager.
During February, fixed-rate home loans were most popular in Queensland, where demand reached 23.05% of all new mortgage loan approvals.
“Following the spate of natural disasters the sunshine state has endured over the past few years, in comparison to other states it isn’t surprising to see more borrowers in Queensland choose the peace of mind offered by fixed-rate loans,” says Belinda Williamson.
Nationally, the proportion of borrowers fixing their home loan rate increased from 16.3% in January to 18.4% in February as all the major banks cut their fixed-rate home loan offerings to include a two-year fixed rate home loan “with a four in front of it” – at 4.99%.
At the other end of the spectrum, Victorians were the least likely to take out a fixed-rate loan in February, with only 11.08% of the state’s loan approvals for fixed rates.
“This may suggest that Victorians are the least conservative state and are tipping further variable rate cuts to come,” says Williamson.
Fixed-rate loans are also popular in NSW and the ACT, accounting for nearly one in five loans approved by mortgage brokers in February.
Not surprisingly, ongoing discounted rate loans – where the variable rate is discounted for the life of the loan, usually in exchange for an annual fee – were the most popular products over February, accounting for 42% of all loan approvals nationally followed by basic variable and standard variable loans, which both accounted for 17% of loan approvals.
Lowest variable rate offerings: $500k loan @ 80%
- Macquarie Bank – 5.44%
- ING Direct – 5.48%
- Suncorp Bank 5.49%
- Commonwealth Bank – 5.50%
Lowest one-year fixed rate home loan offering
- Greater Building Society – 4.84%
- Macquarie Bank – 4.95%
- AMP – 4.99%
- Homeside / NAB – 5.09%
Lowest three-year fixed rate home loan offering
- ME Bank – 4.99%
- AMP Bank – 5.19%
- Bankwest – 5.19%
- Suncorp – 5.25%
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