Nearly one in three new borrowers locked in fixed rates on their loans during March, according to a monthly review by mortgage broker AFG.
AFG’s Mortgage Index for March 2013 shows that 29.6 per cent of all new home loans were fixed rate loans - a leap from 24.1 per cent in February and 16.3 per cent in January.
This is the highest proportion of fixed rate loans the company has seen in the ten years it has been compiling the Mortgage Index.
Mark Hewitt, General Manager of Sales and Operations said there has been an unprecedented surge of borrowers wanting to lock in the currently low rates.
“With many commentators believing the interest rate cycle is at the bottom, borrowers have responded by fixing rates of less than 5 per cent that have been widely on offer”, Hewitt said.
“These rates are very low by historic standards and it makes sense to lock them in while they are still available."
Loan to value ratios (LVRs), which are the value of a home loan expressed as a percentage of the value of the property, were 68.8 per cent in March, consistent with the average over the past year.
LVRs were highest in states where there is greatest first home buying activity (WA and VIC - both 70 per cent) and lowest in NSW (66.8 per cent) where investors typically leverage equity in existing properties when setting up new loans.