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Mortgage Term Length Options
You may be able to choose a variety of term lengths depending on your qualifying ratios. Open Term Mortgage Offering flexibility to payout your entire mortgage without prepayment penalties. Open terms are beneficial for short term mortgage solutions. The downside is that open mortgage terms generally carry a higher interest rate. 6 Months to 4 Year Fixed Terms Shorter terms are useful for a few reasons. You may want to choose a shorter term to coincide with your future plans or possibly take advantage of a lower rate for a couple of years and renew into a rate at maturity before the economy improves and rates increase. The downside is that many lenders will require you to qualify at the Benchmark Rate which is set by the Government and is generally much higher than your actual contract rate. 5 Year Fixed Rate Terms Five year fixed rates are a popular term length as many people prefer rate stability for longer periods of time. Also many mortgage holders are forced into the five year term due the the Government regulations requiring shorter terms to qualify at the Benchmark Rate. Discounted 5 Year Rates are often much lower than the Benchmark Rate allowing purchasers to afford more. 3 or 5 Year Variable Rate Terms To qualify for a variable rate term you will have to qualify at the Benchmark Rate which is set by the Bank of Canada. Variable rates are based on the Prime Rate and the rate may change over the term if the Bank of Canada changes the Target for the Overnight Rate. The Bank of Canada announces possible rate changes eight times per year. 6 Year or Longer Fixed Rate Terms In today’s market there have been many longer term mortgage rates available at historical lows. Many applicants prefer to know that they are locked in for the long term. Also when the term has entered the sixth year of the mortgage the penalty will be three months interest as opposed to an interest rate differential due to interest rate laws.
I WOULD LIKE TO:
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Each Office Independently Owned and Operated
Mortgage Term Length Options
You may be able to choose a variety of term lengths depending on your qualifying ratios. Open Term Mortgage Offering flexibility to payout your entire mortgage without prepayment penalties. Open terms are beneficial for short term mortgage solutions. The downside is that open mortgage terms generally carry a higher interest rate. 6 Months to 4 Year Fixed Terms Shorter terms are useful for a few reasons. You may want to choose a shorter term to coincide with your future plans or possibly take advantage of a lower rate for a couple of years and renew into a rate at maturity before the economy improves and rates increase. The downside is that many lenders will require you to qualify at the Benchmark Rate which is set by the Government and is generally much higher than your actual contract rate. 5 Year Fixed Rate Terms Five year fixed rates are a popular term length as many people prefer rate stability for longer periods of time. Also many mortgage holders are forced into the five year term due the the Government regulations requiring shorter terms to qualify at the Benchmark Rate. Discounted 5 Year Rates are often much lower than the Benchmark Rate allowing purchasers to afford more. 3 or 5 Year Variable Rate Terms To qualify for a variable rate term you will have to qualify at the Benchmark Rate which is set by the Bank of Canada. Variable rates are based on the Prime Rate and the rate may change over the term if the Bank of Canada changes the Target for the Overnight Rate. The Bank of Canada announces possible rate changes eight times per year. 6 Year or Longer Fixed Rate Terms In today’s market there have been many longer term mortgage rates available at historical lows. Many applicants prefer to know that they are locked in for the long term. Also when the term has entered the sixth year of the mortgage the penalty will be three months interest as opposed to an interest rate differential due to interest rate laws.
