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Fixed interest rate demand falls

A spate of attractive variable rate promotions from Australia’s largest lenders has resulted in reduced appetite for fixed rate mortgages.

Demand for fixed rate products fell last month  the first fall since July 2010. The appetite for fixed interest rates is now at its lowest since October 2010.

Last month’s fall in demand coincides with the start of the lender war for home loan volume growth.

It appears new borrowers are lapping up the newly introduced deals on offer in February, taking advantage of lenders various incentives as they compete to outstrip each other of market share.

I think this will continue as the fixed interest rates are no longer that attractive with such a large gap between the variable and fixed rates.