By Gareth Vaughan
The percentage of home loans by value on fixed-term mortgages almost certainly smashed back through 50% of the total last month, a dramatic turnaround from 13 months earlier when the value of floating mortgages hit a record high.
The latest monthly data from the Reserve Bank shows $90.368 billion worth of home loans on fixed-terms as of the end of April. That's 49.33%, and up from just 36.8%, or $64 billion a year earlier.
The Reserve Bank started tracking fixed versus floating data in 1998. The 63% on floating rates in April 2012 marks the high point for floating rates. As of April this year, 50.61%, or $92.724 billion worth of mortgages, were on floating rates. The balance of $89 million, neither fixed nor floating, was unallocated.
The surge back to fixed-term mortgages means if the Reserve Bank was to raise the Official Cash Rate from its record low of 2.5% any time soon, any feed through to the mortgage belt would take time to gain momentum.
Banks' advertised "special" home loan offers are all currently for one to three-years. Some advertised one-year "special" rates are at 4.95%, which is up to 80 basis points below the major banks' advertised floating rates of between 5.65% and 5.75%. See all advertised bank home loan rates here.
Year-on-year, from April 2012 to April this year, the value of floating mortgages fell $17 billion, or 16%, to $92.724 billion. That came even as the overall total value of mortgages rose $9 billion, or 5%, to $183.181 billion. The value of fixed mortgages, meanwhile, surged $26.272 billion, or 41%, to $90.368 billion.
Of the total fixed, $79.858 billion, or 88%, is fixed for less than two years.
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