Massive fixed rate discounts have not wooed borrowers as expected.

New results from Mortgage Choice have indicated a marginal rise in demand for fixed rate products, up to 14.1% in August from 13.3% in July. Ongoing discount loans, meanwhile, continued to gain ground among borrowers. The products rose from 38.6% of approvals in July to 41.5% of approvals in August.

Mortgage Choice spokesperson Kristy Sheppard expressed surprise that well-publicised fixed rate discounting had not filtered through to a significant rise in demand.

"I expected the take-up of fixed rate home loans to grow noticeably in August due to the well publicised reductions many lenders have been applying to their fixed term pricing. Despite our lender panel's average three-year fixed rate falling half a percent in the past four weeks alone, fewer than one in seven new mortgage holders fixed part or all of their rate last month," she commented.

Sheppard posited that many borrowers may be hesitant to lock in rates after a slew of consumers were locked into fixed rates in 2008, just before the RBA aggressively slashed rates from 7.25% to 3.00%.

The company has also reported that demand for standard variable and basic variable home loans fell in August to 19.2% and 18.2%, respectively. Line of credit loans accounted for 4.7% of approvals, and introductory rate loans represented 2.4% of approvals.