In addition, urban dwellers are more likely to choose shorter terms for their mortgages than the rest of the country, the study showed.

However, the decision on the duration of a mortgage is not influenced particularly by whether one lives in a house or condominium, according to SBAB.

The decision by Sweden’s central bank, the Riksbank, to raise the benchmark interest rate and the expectations for more rate increases have resulted in the percentage of mortgages with the shortest term of three months falling from 90 percent in January 2010 to 72 percent last month.

“The biggest explanation for the differences between the age groups is probably related with the life cycle. In the most active working years, earnings are generally higher and people are more willing to take risks,” said Tomas Pousette, chief economist at SBAB and one of those responsible for the report.

Viewed over a longer period, the three-month rate was the most profitable for most. A comparison since 1997 between bound five-year mortgage rates and three-month rates at current five-year periods showed that in 99 percent of the cases, the three-month rate was the best option.

“However, one does not have the benefit of hindsight when making these decisions. I think it is funny that the younger owners, who may be buying their first properties for themselves, are cautious,” said Pousette.

Last year, the difference between long- and short-term mortgage interest rates fell, leading to loans with the shortest terms declining by about 10 percentage points across all ages, housing types and regions. However, SBAB believes that this trend has come to an end.

“We believe that longer home interest rates will rise more than short ones this year and interest will increase again for the shortest terms. However, we will not go back to the peak level in 2009,” said Pousette.