Move to fixed home loan rates starts

The latest Reserve Bank figures show floating rate mortgages accounted for 61.7% of total mortgage lending by registered banks at the end of May, down from 63.1% at the end of April.

That's the first monthly decline since August last year when floating rate mortgages accounted for 56.3% of the total. August last year was clearly an aberration since before that the percentage of floating rate mortgages had been climbing since August 2009 when they accounted for 22.8% of the total.

The bulk of the shift is occurring into the one to two-year fixed-rates which accounted for 13.3% of the total in May, up from 11.8% in April and as low as 9.6% in February. Pre-GFC, two-year fixed-rate mortgages were the most popular.

Other central bank figures showed the price war has pushed mortgage approvals significantly higher but credit growth has barely lifted.