An increasing number of people taking out home loans are choosing fixed low interest rates, according to figures published by Australian Finance Group (AFG).
According to the AFG Mortgage Index, the proportion of fixed rates bounced up from an all-time low of 3.2 per cent in November to 5.7 per cent in December.
The strong demand from first home buyers and home owners refinancing their property contributed to stronger than expected mortgage sales in December. There was an 11 per cent increase in the volume of loans compared to December 2007.
The general manager, sales and operations at AFG, Mark Hewitt, said: “It would be premature to call a turnaround in the mortgage market based on a single month’s performance, but December figures were an encouraging sign. There is a traditional softening in mortgages at this time of year as people enjoy the festive season, but mortgage sales held up more strongly than expected.”
Hewitt said the number of people taking up fixed rate loans would increase as first home buyers take advantage of financial incentives.
