Standard variable overtakes basic variable as most popular product type

The popularity of fixed rate loans in Australia has dropped slightly to just under 7% as lenders continue to raise interest rates for this loan type. According to August 2009 data from Mortgage Choice, Australia’s largest independently-owned mortgager broker, demand for fixed products has stood at less than 10% of all its loan approvals for 14 months now.

Demand for variable loans also remained relatively steady, for the third consecutive month, at 86% - only two percentage points below the 12-month average. However, standard variable loans (where eligible customers with a loan of over $150,000 can receive discounts on the interest rate plus other professional package features) have become more popular than their ‘plainer’ counterpart.
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Variable loans still the favourite flavour

Fixed rate loan demand hit its highest level since July 2008 at 8% of all loan approvals in June 2009 for Mortgage Choice, Australia’s largest independently-owned mortgage broker.

However, variable rate loans remained very much the favourites at 86% of all loan approvals. Demand here has been tracking at over 80% since August 2008.

Basic variable loans were the most popular type of loan in Australia, at 47% of all loan approvals. This is quite some way front of the 12-month average of 42%.

Demand for standard variable loans, many of which are professional packages (where eligible customers with a loan worth over $150,000 can receive discounts on the interest rate along with other professional package features), rose to 40%.
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