Fixed rate demand rises - but all states not equal

Demand for fixed interest rate home loans increased to five-year highs across Australia this month, according to Mortgage Choice national home loan approval figures. 

However, rates varied across the states, with New South Wales and Victoria increasing their fixed rate appetite while fixed rates lost favour in the remaining states. 

Fixed rate home loans accounted for 28.04 per cent of all new home loans approved in April, up from 27.58 per cent in March and 18.41 per cent in April, and the highest level of interest in fixed rate loans since March 2008 when it reached 34.87 per cent. 

Demand for more conservative fixed interest home loans increased by 7.94 per cent to 32.45 per cent, while Victoria increased by 1.28 per cent to 21.24 per cent. 

However, demand dropped by 6.53 per cent to 30.41 per cent in Queensland, South Australia tumbled 4.95 per cent to 27.31 per cent, and Western Australia fell 0.55 per cent to 23.70 per cent. 

Mortgage Choice spokesperson Belinda Williamson said the rise in fixed interest rate demand was no surprise, given highly competitive fixed rate loans. 

“What came as a surprise was that the majority of states - Queensland, South Australia and Western Australia - saw demand for fixed rate loans fall, albeit slightly,” she said. 

“With no obvious economic factors instigating the trend, it might be a sign of growing consumer confidence - time will tell!”