Raw Deal

Females are more likely to get a raw deal on interest rates when it comes to taking out a mortgage, yet they appear smarter when choosing the repayment structure.

Males with 36.5 per cent have a much higher ability to qualify for the interest rate reduced professional package mortgages, compared with just 28.0 per cent of females, new research from CoreData shows.

As a result females with 22.2 per cent have a much higher propensity to take out the often high interest rate and fee ridden low documentation loans, compared to 16.5 per cent of males.

Many non-bank lenders target the low documentation market, which is reflected in 15.6 per cent of females borrowing from a non-bank lender, compared to 9.7 per cent of males.

More men use mutuals for their primary mortgage with 8.3 per cent, with females 4.9 per cent.

Women though are much smarter when it comes to the repayment of a loan, with 19.1 per cent having a fixed loan when official cash rates are at 49 year lows, compared to 15.1 per cent of males.

It seems that while one fifth of women prefer the certainty of locking in their rates and one in eight for men, then general consensus in the market is that rates may have further to fall, with so many people opting for fluctuating rate structures.

Economists and markets are predicting another 0.25bps drop in official rates before a period of possible monetary policy tightening through mid-2010 and beyond.

It will be interesting to see if and when official rates do drop further the ratio of home-owners who will look towards locking in their rates at that period.