Fixed rate home loans accounted for 22.97% of all loans written in January, up from 22.04% in December and 19.51% in November, according to the latest national home loan approval data from Mortgage Choice.

“The last time fixed rate demand was this high was back in May 2016,” said Mortgage Choice chief executive officer, John Flavell.

Flavell said anticipation of higher interest rates was prompting mortgage holders to lock in a fixed rate now, before they move higher.

“It would seem the threat of rising interest rates is enough to encourage a growing proportion of Australian mortgage holders to partly or wholly fix their home loan," he said.

Flavell said there could be further increases in demand for fixed rate mortgages, especially if the Reserve Bank lifts the cash rate, or banks continue to lift mortgage rates.

Demand for fixed rate mortgages was strongest in New South Wales, accounting for 28.07% of all loans written in January.

In Western Australia, fixed rates accounted for 27.6% of all mortgages written, and Queensland fixed rates accounted for 24.09% of mortgages.

Somewhat surprisingly, in Victoria only 13.91% of all loans written in January were for fixed rates.

Despite the growth in demand for fixed rates, variable rate loans remain the most popular mortgages.

Flavell said despite the recent shift upwards in mortgage rates, fixed and variable home loans interest rates remain at historic lows.

“Interest rates are still incredibly low by historical standards," he said.

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