Fixed-rate loan demand eases

Posted on 9/07/2013  
Fixed-rate loan demand eases

Demand for fixed-rate home loans dropped in June – the first decline since February.

Mortgage Choice says fixed-rate home loans accounted for 28.3% of all new loans approved in June. This was a fall of 1.8 percentage points compared to May.

But it's still well up on fixed-rate market share in previous years - 18% in June 2012, 12.3% in June 2011 and 2.6% in June 2010.

"While fixed-rate loan approvals remain relatively high compared to previous years, the slight drop recently may be due to talk of further variable interest rate cuts this year," says Mortgage Choice spokesperson Belinda Williamson.

"The cooling in demand comes despite lenders re-pricing fixed rate loans and bringing out appealing offers in the hope of attracting more customers in the face of subdued home loan demand and uncertain economic conditions."

In June, almost two-thirds of home loan providers - including major banks, smaller banks, credit unions and building societies - reduced their interest rates on fixed-rate home loans.

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