A recent report has suggested that an increasing number of Australian homeowners and would be homeowners are now opting for fixed rate mortgages for fear of rates going back up.

Over recent years many homeowners and property purchasers have opted for variable rate mortgages, so that they could benefit from interest rates going down as and when this happened. However, according to a recent report more and more homeowners as well as would be buyers are now looking at fixed rate mortgages, as many want to protect themselves against rising interest rates.

With the base interest rate in Australia having dropped over recent months many of those looking to refinance or get a new mortgage do not want to be put in the position where they take out a variable rate mortgage only to find that the interest rates rise, which means that their repayments will also increase, in some cases by a significant amount.

For some, the natural choice is to opt for a fixed rate mortgage deal, as this means that even if the base interest rate does increase, as many expect it to do, the repayments of those that are on these mortgage deals will not be affected, offering them financial peace of mind and stability at least for a set period of time.

Officials from the Reserve Bank of Australia have said that with the recession likely to come to an end there is a better chance of the base interest rate rising than there is of the rate falling, and this has spurred many on to opt for fixed rate loans whilst the going is good, so that they can fix their mortgage rates at a low level whilst these lower rates are available.

Source - The Age

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