Why so few people are choosing fixed-rate loans right now
Only 1.40% of the home loans that were funded in March were for fixed-rate loans, while 98.60% were for variable-rate loans, according to the latest data from the Australian Bureau of Statistics.
In dollar terms, $47.498 billion of mortgages were issued in the month, with $0.664 billion being fixed and $46.834 billion variable.
Borrowers tend to fix when they expect interest rates to rise in the future or they need budgetary certainty, while borrowers tend to go variable when they expect rates to fall. Most economists think we’re at or near the top of the interest rate cycle, and that rates are likely to start falling in late 2024 or 2025, which explains why variable loans are so popular right now.
If you’re thinking about buying a property or refinancing an existing mortgage, it’s important you choose an interest rate type that works for you, whether that’s fixed, variable or split (which involves some of your loan being fixed and some variable). At Finestream, we’ll take the time to understand your personal scenario, so we can recommend a loan that’s right for you. Get in touch to discuss your options.
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