The nation's borrowers are continuing to resist fixed home loan rates, despite some "very attractive" pricing, Mortgage Choice CEO Susan Mitchell says.

The company's home loan approval data for July revealed a further drop in demand for fixed-rate home loans, which accounted for 14 per cent of all home loans written, in comparison with 21 per cent in June.

Ms Mitchell said the opportunity to save on repayments if the Reserve Bank cut the cash rate was proving too good to pass up.

“It’s not entirely surprising that borrowers are choosing to keep their options open by opting for variable rate home loans," she said.

“Last year, a low fixed rate would have been under 4 per cent p.a., but today we are seeing rates starting with a 2, which is certainly the lowest fixed rates we have seen in recent history.

“In the minutes of the RBA Board’s August meeting released yesterday, members judged it reasonable to expect that an extended period of low interest rates would be required and suggested that further easing of monetary policy may be on the cards."

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Source: Mortgage Choice

According to the data, borrowers in Victoria were the least likely to fix (7 per cent), followed by South Australia (12 per cent).

Borrowers in New South Wales were the most likely to fix their home loan interest rate, with 19% of borrowers preferring a fixed-rate home loan.

Ms Mitchell said while borrower preference had been leaning towards variable rate loans recently, there were still many reasons why it may be a good time for borrowers to fix part or all of their home loan.

“The certainty that comes from knowing exactly how much your home loan repayment will be each month brings peace of mind to many borrowers, especially first time buyers who are adjusting to life with a home loan," she said.

"As the interest rate on a variable rate home loan may change over time, it can be harder for these borrowers to manage their budget and continue to meet their loan repayments if interest rates do eventually rise.

“The home loan market is particularly competitive at present, with lenders offering deals for new borrowers, which means that if you are considering buying your first home, upgrading or refinancing your home loan, there’s arguably never been a better time." 

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