Key Facts:

– New mortgages with fixed interest rates have reached a record high as a share of the mortgage monies advanced.
– In September, the share of total new residential lending on fixed interest rate terms rose to 82.8%, the highest share on record.
– One and two year mortgage terms have always been popular, but there has been a recent surge of interest in six-month terms.
– One-year fixed terms account for 27.1% of all new lending for owner-occupiers, while 18-month terms rose to 16.4%.
– Six-month term mortgages make up just 5.3% of owner-occupier new borrowing but reached the highest amount since April 2021.

Article Summary:

According to the latest Reserve Bank figures, new mortgages with fixed interest rates have continued to rise and have reached a new high as a share of the mortgage monies advanced. In September, the share of total new residential lending on fixed interest rate terms reached 82.8%, the highest share on record. This suggests that those taking out new mortgages are looking for the cheapest deal in terms of rates.

One-year and two-year mortgage terms have always been popular, but there has been a recent increase in interest for six-month terms. While one-year fixed terms continue to be the most popular term for owner-occupiers, accounting for 27.1% of all new lending, there has been a slight decrease from the previous month. On the other hand, the share of lending on 18-month terms increased to 16.4%.

Additionally, six-month term mortgages, although making up a small percentage of owner-occupier new borrowing at 5.3%, reached the largest amount since the data series began in April 2021. This suggests that there may be buyers waiting to see if there will be some easing in rates in the first half of next year.

For residential investor mortgage lending, there was no change in September, remaining flat at $1.26 billion. One-year fixed terms were the most popular, accounting for 31.6% of new lending.

Source Link: To read the full article, click here.