The demand for fixed rate loans among Western Australian borrowers slumped to 28% in March, significantly down from the record figure of 35% only a month ago, the latest Mortgage Choice housing loan approval data revealed.
Mortgage Choice National Corporate Affairs Manager, Warren O'Rourke said, "Demand for fixed rate loans by West Australian borrowers fell to their lowest levels since January.
The uptake of such loans in the state has see-sawed during the past six months as the pricing shifted and borrowers have sought more affordable loan products such as the standard variable loans offering more generous discounts and greater flexibility."
"There appears to be greater confidence among borrowers to manage the present interest rate climate while those who have not been able to wear any more rate increases have already taken the necessary steps to fix their rates."
Standard variable loans were very popular, reaching 38% of all loans in this category, up from 32% in February and well up on the six-month and 12-month average of 30%.
This also suggests borrowers are anticipating greater interest rate stability in the coming months.
"The other interesting trend is that demand for basic variable loans in Western Australia fell to 16% of all approvals in this category.
This was much lower than the 12-month average of 25%. It is obvious that the dip in demand for basic variable has been driven by the increase in demand for standard variable loans," Mr O'Rourke said.
Line of credit loans were more popular in March, representing 18% of all loan approvals in the category, up from 16 in February, with anecdotal evidence suggesting many investors are seeking properties interstate.
