Home buyers flock to ‘safer’ variable rate mortgages
With the global economic crisis pushing down interest rates to their lowest level in 49 years, home buyers are flocking back to variable interest rate mortgages, which now account for 91 percent of the residential lending market.
Mortgage broker Mortgage Choice have reported that in April basic variable mortgages accounted for 48.15 percent of all home loans approved – up nearly one percent from March, while standard variable mortgages comprised 42.77 percent of the market, down 1.47 per cent from March.
According to Mortgage Choice senior corporate affairs manager Kristy Sheppard, basic variable loans have been the most popular loan type for four months now, with consumers seeking out ‘safer’ and more conservation loan options in the current climate.
“Despite interest rates being at their lowest in decades, the volatile global and domestic economic climate is having a strong influence over loan product preferences,” Ms Sheppard said.
“Consumer conservatism with rates and fees continues to win out against loan flexibility and extra features.”
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We are starting to see more Fixed Interest loan inquiries though the market mostly still believes that there is still more variable interest rate cuts to come and are holding out for this, thinking perhaps that they will lock into a fixed rate when the variable rates have dropped further.
Trouble is, this is unlikely to flow onto the fixed interest rate market and the train is leaving the station. For a full explanation as to why fixed interest rates are unlikely to get lower and borrowers should consider locking in read http://www.mortgagecorp.com.au/fixed-interest-loans/
One of the physiologic needs according to Maslow, is shelter where we can stay and feel secured. But to the economy we are facing, we, the home buyers, are having a hard time satisfying our needs. So some of us take neccesery action like looking to installment loans rather than traditional mortgage loans, and more people are looking at foreclosed homes. If they can get qualified, cheaper prices means easier access, and maybe less mortgage loan modification.
Wow! a nice site, I like to visit more frequently.
Everyone now moving towards the safer variable rate mortgages for more flexibility.