Fixed rates popular with borrowers

Only 29.1% of mortgages were at floating rates, as at August 30. This is significantly down on previous years. Two years ago the figure was 39.6% and a year ago it was 33.7%.

The increase in fixed rate loans recently has come predominantly in the over one year area with the proportion of loans coming up for renewal within a year from August trending down since early last year when fixed rates started heading to their record lows.

This data confirms the view that the Reserve Bank’s moves to increase the Official Cash Rate will be having little impact on home loans.

When it moves the OCR it is directly reflected in variable home loan rates, but doesn’t impact on fixed rates as they are priced off other variables, such as interest rates in the United States.

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