Rate City shows 31 lenders are offering, or are set to offer, a mortgage rate under 2pc

House hunters and first-home buyers are flocking to fixed interest loans as borrowers seek a better deal.

House hunters and first-home buyers are flocking to fixed interest loans as borrowers seek a better deal. Picture: iStock

House hunters and first-home buyers are flocking to fixed interest loans as borrowers seek a better deal after the Reserve Bank last week cut interest rates to a record low of 0.1 per cent.

Analysis by Rate City shows 31 lenders are offering, or are set to offer, a mortgage rate under 2 per cent — almost triple the number before last week’s historic RBA cut.

Mortgage Choice chief executive Susan Mitchell said Australian banks had reported a rush to their loan products.

“Everybody is benefiting from the home-lending demand. All of the banks are seeing some historical volume of applications coming through,” she told The Australian.

“There’s historic low rates, there’s great cashback offers and there is government stimulus out there in the market so a lot is happening.

“You don’t have to go to a bank you haven’t heard of to get a great rate. Three of the big four are offering fixed rates below two.”

Rate City’s analysis found that of the 41 lenders which announced rate cuts since last Tuesday, only five had passed on variable rate cuts to existing customers, with 1.77 per cent the lowest variable rate on the market. From November 19, 1.88 per cent will be the lowest fixed rate on the market.

Ms Mitchell said one third of Mortgage Choice’s customers were signing up to fixed home loans, with the remainder opting for variable rates.

“For fixed, that’s up from 13 per cent a year ago so that’s a very large shift,” she said, adding that demand was concentrated in the owner-occupier market.

“Investment properties are a little bit difficult because it’s up in the air right now about how renters are being treated and if your property will continue to have rent coming in.”