Westpac’s announcement last week that it will raise interest rates on investor and owner-occupier loans by 0.2% from mid-November prompted predictions that other lenders will follow suit and ME general manager Lino Pelaccia believes consumers will turn to fixed-rate loans to protect themselves from any such increases.
“We’re expecting demand for fixed rates to jump as people seek certainty from the growing speculation around what variable rates will do in the foreseeable future,” Pelaccia told Your Investment Property Magazine’s sister publication, Australian Broker.
“We’re seeing more borrowers starting to consider locking in at least some their home loans with a fixed rate,” he said.
Recent figures have shown that fixed-rate loans have recently fallen out of favour with many borrowers.
Earlier this month, Mortgage Choice revealed that fixed-rate loans accounted for only 14.41% of loans written through September, down from 17.41% in August.
Mortgage Choice CEO John Flavell said that was the lowest demand for fixed-rate home loans since August 2011.
Those figures were then reinforced last week when mortgage broking firm AFG released statistics showing the proportion of fixed-rate loans it had processed during the September quarter fell to a three-year low at just 11.3%.
