Veda report shows home loan applications highest in four years The interest rate game ... low rates are prompting more loan applications. Low interest rates have helped new home building to record its second highest rate of expansion since 2005. AUSTRALIANS are applying for home loans at the highest growth rate in four years because of historically low interest rates and a growing building industry, new figures show. Credit reporting agency Veda's December quarter report, released today, showed mortgage demand grew significantly towards the end of last year despite consumers remaining cautious around other types of credit - including credit cards and personal loans. The report, which tracks credit inquiries made to financial institutions, showed mortgage applications rose by 15.3 per cent in the December quarter compared to the 2012 December quarter. IRVINE: Rent is not a dirty word IRVINE: Home owning dream becomes a nightmare Mortgage inquiries also rose by 9.3 per cent compared to the September quarter. Veda's general manager of consumer risk Angus Luffman said the record low interest rates helped fuel applications towards the end of last year. "Mortgage inquiries have accelerated across the course of 2013 and we saw that continue into the December quarter and it's in double digits at 15.3 per cent," he said. An extended period of low interest rates is supporting the lift in mortgage inquiries which have stepped up a level and are now showing the strongest growth since late 2009. Since 2009 we've had a relatively soft demand for mortgages in the market. CommSec economist Savanth Sebastian said the combination of low rates and growth in the building industry had helped mortgage application numbers rise. "The interest in housing ramped up significantly over the past 12 months particularly with the low interest rates on offer," he said. But it wasn't just low rates - it was the fact that business and consumer confidence levels rebounded back to a very optimistic setting. You look at dwelling commencements, new home sales, building approvals, all those figures are well above their decade averages across Australia, building approvals are holding almost 20 per cent above their decade averages. The results found consumer credit demand was flat for the quarter and rose by just 0.4 per cent year on year. Personal loan inquiries fell by 1.4 per cent and credit card inquiries increased by just 2.4 per cent.