More fixed rate loans
PERSISTENT speculation that interest rates will need to increase in coming months has seen an increase in the number of homeowners seeking the comfort of a fixed rate loan.
Home loan provider Mortgage Choice says 12.3 per cent of all its mortgage approvals in June were fixed rate loans, the highest level in five months.
Mortgage Choice spokesperson Kirsty Sheppard said yesterday that every state bar South Australia saw a rise in fixed home loans in June, the largest increase coming in Western Australia, where they rose to 14.2 per cent from 9.4 per cent in May.
“Perhaps the constant speculation about interest rate rises in the latter half of 2011 and beyond convinced a higher number of borrowers to simply lock in their rate rather than feel their stomach churn with each piece of speculation,” she said.
The Reserve Bank holds its monthly board meeting today, but economists expect the central bank to keep the cash rate at 4.25 per cent for at least another month ahead of key inflation data on July 27.
The Reserve Bank last raised the cash rate in November last year.