Young buyers opt for fixed rate loans

  • April 5, 2013
  • Ayda Shabanzadeh
  • Investment

To fix or float, that is the question? It is one that every mortgage holder must ask themselves and many people end up feeling burnt by their decision but with interest rates at all time lows the question has become less murky.

More and more young buyers are opting to lock into fixed rate loans for the time being so that they can take advantage of these rates for as long as they can. For younger people whose incomes will trend up there is confidence in knowing that while the mortgage is fixed for a certain period their earnings could go up in the same period, making the mortgage relatively smaller.

There are many different options available, with the split being a good way of hedging your bets. These cocktail loans, as they are called, are perfect for people who like to keep track of rates and are willing to chop and change. However, many people do not have the time or the inclination to follow the rates and once they have a mortgage type they will simply stick with it.

For now it looks like the fixed mortgage will stay the most popular choice, though it is important to choose a mortgage type that suits your current and future reality.