Demand for fixed rate home loans fell in March, reveals new data from Mortgage Choice, prompting many lenders to reduce their interest rates for fixed-rate loans.

According to its latest national home loan approval data, demand for fixed-rate home loans fell in March, accounting for 21% of all home loans written – a reduction of 1.38% from the previous month.

Mortgage Choice chief executive officer Susan Mitchell says it’s not surprising to see borrowers taking a tentative approach towards fixing their interest rate.

“There is a great deal of uncertainty surrounding the housing market at present, which could be weighing against borrowers’ decisions to commit to a fixed term,” she says, pointing to the upcoming Federal Election and increasing speculation that the RBA will cut the official cash rate soon.

“That being said, lenders would be acutely aware of borrowers’ reluctance to fix, and have in the last few weeks responded by cutting rates on some of their fixed rate products. Those looking to fix could enjoy great rates right now.”