To float or fix long (or short)?

Deciding whether to float or fix your mortgage is becoming more complex. While short-term rates were recently popular, Reserve Bank data shows a growing number of borrowers are choosing longer fixed terms, reflecting uncertainty as the Official Cash Rate may be nearing its low point.

Borrowers must now weigh paying more for flexibility against the security of a longer-term rate. The market also sees many first home buyers utilising low-deposit loans, while Debt-to-Income (DTI) limits are becoming a factor for some.