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Fixed-rate mortgages becoming increasingly popular in Australia

A growing number of homebuyers in Australia want to take out fixed-rate mortgages on their properties, a new report has revealed.
Research carried out by Ipsos on behalf of Gateway Credit Union found that one in five homeowners in the country is planning to change their split-rate mortgage to a fixed-rate deal in the near future, with more than one-third (38 per cent) planning to do so within the next three to six months. A further 24 per cent said they intend to make this move in the next six to nine months.
Another recent survey, this time from Mortgage Choice, found that over one-quarter (26.43 per cent) of all home loans granted in May 2017 were fixed-rate mortgages, with property owners in New South Wales (NSW) most likely to go for this option.
In NSW, fixed-rate loans accounted for 31.53 per cent of all mortgages, along with 27.71 per cent of all those granted in Queensland. Over in Victoria and Tasmania, where fixed-rate mortgages were not quite as popular, they still accounted for 17.6 per cent of all mortgages granted last month.
It is thought that the main reasons behind so many homeowners wanting to switch to a fixed-rate mortgage include the fact that household debt levels are rising, while wage growth is stagnant and new bank levies have been introduced. Together, these factors point to fixed-rate mortgages as a potentially less risky and more secure option for householders at present.
Paul Thomas, chief executive officer of Gateway Credit Union, explained: "It seems borrowers are betting that rates will be on the rise towards the end of the year or early next year.
"However, mortgage holders who are concerned about covering their repayments if rates were to rise should be thinking about locking in a fixed rate sooner rather than later to take full advantage of the historically low rates."

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