Stability. This is what most of us are searching for in our lives and with our finances. For a large majority of borrowers, the idea of having fluctuating monthly mortgage payment amounts makes them feel uneasy.
If you’re one of those individuals, you will no doubt benefit from a 10-year fixed rate mortgage.
Mortgages work on a term cycle. This means that every few years the term comes to an end, allowing you to refinance and renegotiate your mortgage. With a 10-year fixed rate mortgage, you are given a 10-year term. The ‘fixed rate part’ of the scenario means that your mortgage’s interest rate will not wavier during the entirety of the 10-year term.
A constant interest rate is convenient for some Canadians because it gives them a sense of stability. When your interest rate remains the same, you know exactly how much each monthly mortgage payment will be. There is no guesswork or market watching involved with a 10-year fixed rate mortgage, and your payment amounts will not differ for 10 years.
Generally, Canadians choose five-year fixed rate mortgages, but this is not to say that acquiring a 10-year term isn’t a good idea. If you don’t have any desire to break your mortgage or refinance for 10 years, this kind of mortgage can give you piece of mind.
The only downside to having this type of mortgage is that you do not get to enjoy lower interest rates when they hit the market because you are locked in to your rate for 10 years. Conversely, you will be protected against rising interest rates.
Financially, we are not all the same. When it comes to your mortgage you need to choose the package that ultimately fits your needs.
The best way to find the ideal mortgage to suit your financial situation is to meet with a broker. Mortgage brokers offer un-biased advice when it comes to the lending industry. They work with a myriad of lenders to get their clients the best deals and rates. While a 10-year mortgage term with the same rate in play will suit some borrowers, it is not for everyone.
When you sit down with your mortgage broker, you will be given options and together you can figure out what works best for you.Back
Canada’s mortgage website
Your home is your most valuable asset. It is probably the single largest investment you will make in your lifetime. Your home is more than a place to rest your head and raise a family. Your home contains equity. It is a treasured resource and in some cases, can even be used as an ATM (aka cash back mortgages and HELOCs – don’t worry we’ll get there).
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