Australian borrowers are rushing to lock in their mortgages, with the number of fixed-rate loans doubling in the past year.
According to a media report, fixed-rate loans now account for 14.5 percent of all new mortgages, the highest level since 2008. The rise in fixed loans comes after major banks in the country reduced rates to grow loans and lock in customers.
Commonwealth Bank, the country’s largest bank, slashed some of its key fixed rates by as much as 40 basis points.
Tony Meredith, Personal Lending General Manager at Suncorp Bank, said the bank’s fixed loan applications rose from five to 21 percent in the past year.
“After the November and December rate cuts and also the declines in the fixed rates since the middle of March, fixed rates have been a popular choice across the market because there is a discount to some of the standard variable rates available,” he said.
“We often see an increased take-up of fixed rate loans during periods of ongoing economic and market volatility and as costs of living rise.”
Fixed rates among the major banks, including discounts, are over 50 basis points lower compared to most standard variable rates.
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