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Fixed or variable – this is the great ongoing home loan debate. Whilst the industry experts continue to offer their advice to new and refinancing mortgagees, the latest figures indicate a growing demand for fixed rate loans.

RateCity data shows 22% of all its home loan applications in January, and 17% in February, were for fixed rate mortgages up from an average of 16% per month in 2012. January applications through their site showed an almost 50% jump in uptake of fixed rates compared to January 2012.

Australian Bureau of Statistics data also shows a growing interest in fixed rates among borrowers, with 60% more fixed loans settled in 2012 than 2011. In fact, there were about 69,000 fixed rate home loans financed in 2012 according to ABS figures.

The average three-year fixed rate is 5.47% while the average variable rate is 5.89%. While average variable rates have previously been below 5.89% in the past, average three-year fixed rates have never been this low according to RateCity.

Michelle Hutchison, spokeswoman for RateCity, said home loan rates were now available below 5%. “Both three-year fixed and variable home loan rates start from as low as 4.99%,” she said. Ms Hutchison also highlighted the fact that rates had continued to drop in recent weeks. “Several lenders cut fixed rates today by up to 30 basis points,” she said.

(Information for this article was taken from the RateCity website www.ratecity.com.au)

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