Lenders have pursued different interest rate strategies for their variable rate and fixed rate mortgage products over the past couple of months, with variable rates going up and fixed rates coming down. According to the latest Mozo Banking Roundup, most of the changes to variable rate loans in December and January were rate increases, while most of the fixed rate changes over the same period were cuts. Borrowers can get a three-year fixed rate loan from Australian Mutual Bank for 5.48 per cent, which is cheaper than any variable rate offer in the market today. However, borrowers are not interested in fixed rates at the moment. With the expectation that the cash rate will start to fall some time this year, borrowers are opting for variable rates in anticipation of lower rates ahead. AFG reported in its latest mortgage index that only 2.3 per cent of the loans arranged by its brokers in the December quarter were fixed rates. Mozo said that in the variable rate market, ANZ, Australian Mutual Bank, Auswide Bank, ING Bank and Macquarie Bank (which increased rates in December but then cut them in January), P&N Bank, Unloan and Up all raised variable rates over the two months. Rate increases were in a range between 5 and 25 basis points, with Up and Unloan making the biggest moves. ANZ increased the rate on its Simplicity Plus basic loan by 10 bps. In the fixed rate market, AMP Bank, Bank Australia, Bank of Queensland, Bendigo Bank, Beyond Bank, Great Southern Bank, Macquarie and MyState all cut rates. The rate leaders in the variable rate market are Homeloans 360 and The Mutual Bank, which are both offering an owner occupier variable rate of 5.89 per cent. Easy Street is offering an investor variable rate of 6.04 per cent. The rate leaders in the fixed rate market are Illawarra Credit Union, which is offering 5.9 per cent for one year; Australian Mutual Bank, which is offering 5.63 per cent for two years, 5.48 per cent for three years and 5.63 per cent for five years; and Up (5.8 per cent for four years).