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By Tim Neary
March 5, 2012
Belinda Williamson
Demand dipped for ongoing discount rates in February while somewhat surprisingly fixed rates held their ground, new data has revealed.
Ongoing discount rate loans fell 4% to 42% in the month, but remained well above the 12-month average of 38%, according to loan approval data from independently operated mortgage broker Mortgage Choice.
Fixed rate loan demand steadied at 21% - on par with both January and the six-month average, but ahead of the 12-month average of 16%.
Company spokesperson Belinda Williamson said a number of the year's earlier discounts were scaled back in February, as lenders responded to shaky global economics.
"We were surprised to find that despite lenders raising their home loan interest rates independently of the Reserve Bank during February, and ongoing concern around the direction of interest rates, our borrower data did not show any increased interest in the repayment security offered by fixed rate loans," Ms Williamson added.
"The fact that only one in five new loan customers opted for fixed rate loans reflects that there is still a large volume of borrowers willing to ride the variable rate rollercoaster," she said.
Basic variable demand rose to 17%, from 14% in January.
Standard variable demand grew marginally to 16% from 15%.
Line of credit loan popularity held steady at 3% and interest in introductory rate loans remained below 1%.
Related Stories
CEO bullish about earnings growth, despite drop in profitability - For the half year to December 2011 Mortgage Choice's after tax profit dropped 26.1%, but CEO Michael Russell said there is good reason for that.
End of fixed rate 'golden' cycle - latest data - After a strong run fixed rate demand took a tumble in January for the first time in eight months, according to new loan approval figures.
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