Demand for average fixed-rate mortgages in Australia hit almost 11 percent in November, the highest level seen in 29 months, according to data released by a mortgage broker.
This was over the 7.7 percent demand for fixed-rate mortgages recorded in October, and before the Reserve Bank increased the cash rate last month, that drove large increases in variable mortgages by Australia’s major banks.
“Australia’s hunger for fixed interest rates is well and truly becoming a louder rumble,” said Kristy Sheppard of Mortgage Choice.
The highest pricing of most fixed rate loans had not prevented one in nine new home borrowers from fixing the rate of their mortgages. “The value of peace of mind over repayment level should not be underestimated,” said Ms. Sheppard.
The attractiveness of fixed-rate home loans, which offer a set term of fixed minimum repayments, usually three years, has highlighted the rising caution amongst borrowers when facing higher living costs and interest rates.
Mortgage broker Loan Market has also faced several enquiries from homeowners looking to downsize their homes to reduce their mortgage obligations.
“Our call centre rarely receives downsizing inquiries in any given week of the year,” said Dean Rushton, chief operating officer of Loan Market. “So the influx of this type of enquiry indicates mortgage holders are really feeling the impact of last month’s Reserve Bank rate rise.”