One in four property buyers are plumping for fixed rate mortgages, according to figures from AFG, one of Australia's largest insurance brokers.
This is the highest figure ever recorded by the broker for this type of loan and suggests consumers fear another rate hike, AFG executive director Malcolm Watkins said.
"People do not lock in fixed rate mortgages if they believe that rates have peaked. The relatively high proportion of buyers going fixed rate is not so much a reaction to the November rate rise as a signal of concern that rates may well being going up again," Watkins said.
The AFG Mortgage Index showed 25 per cent of all new mortgage sold by the company were fixed rate, which was almost three times the low of 9 per cent recorded in August 2005.
A further rate rise would be painful and two rises devastating, according to an AFG survey of 350 of its brokers.
There was a 16 per cent month-on-month increase in the number of mortgages sold in November 2005, compared to 23 per cent month-on-month increase between October and November, according to AFG. This indicates the seasonal trend was less robust than 2005.
