Despite the continuing fall of variable home loan rates, demand for fixed home loan has continued to grow.

According to financial comparison website, RateCity, 22 per cent of home loan applications through the website were for fixed home loans in January, recording a total increase of 47 per cent year-on-year.

Australian Bureau of Statistics (ABS) Housing Finance data, analysed by RateCity, shows more fixed home loans were financed last year. In 2012, there were about 69,000 fixed home loans financed, which was about 60 percent more than in 2011.

Michelle Hutchison, Spokesperson for RateCity, said it was unusual to see a rise in popularity for fixed home loans while variable rates were falling.

“Historically, borrowers generally chose to stick with a variable home loan rate if they were falling because they don’t want to miss out on the savings that come with lower repayments. So in that regard it’s unusual to see so many borrowers applying for fixed home loans while variable rates are still falling,” Ms Hutchinson said.

“The past two interest rate cycles where variable rates dropped in 2000-01 and 2008-09, we saw a dip in the number of fixed home loans financed. And while rates have been falling since November 2011, the number of fixed home loans financed has increased.

“Much of the popularity in fixed home loans is from the attractive rates with many lenders offering more competitive deals for fixed rates compared to variable.”