Three-Year Fixed Rate Mortgages

If everyone’s financial situation was exactly alike, we wouldn’t need different types of mortgages. Unfortunately, our bank accounts do not contain the same monetary sum as our friends and neighbours. However, this does leave us with a buffet of mortgage options for our home purchasing needs. Some people are looking for rate stability while others are hoping for shorter terms. For those hoping for shorter terms, a three-year fixed rate mortgage might be your best bet.

What is a three-year fixed rate mortgage?

A three-year fixed rate mortgage is a loan that maintains the same interest rate for a specified period of time. In this case, the time period is three years. When your terms are up at the end of three years you have the option to move into another product without penalty or keep the same type of mortgage.

Because this mortgage provides borrowers with a fixed rate, you do not have to worry about interest rates going up or down for the duration of your three-year term. Your rates will stay the same for three-years, giving you stability and allowing you to budget properly for your monthly mortgage payments.

Do three-year fixed rate mortgages benefit borrowers?

For many Canadians, a three-year fixed rate mortgage brings with it countless rewards.

• Rates are generally lower for three-year mortgages than their five-year counterparts
• They are the middle ground between a long-term mortgage and short-term one because although they do not offer rate protection for more than three years, the interest savings alone are worth it for some borrowers
• Not everyone is looking to take on a mortgage for a long period of time and three years makes that possible
• Conversely, if you are looking to have a mortgage for the long term, you can refinance after only three years
• Short term mortgages offer you the chance to dip into your home’s equity for renovations sooner rather than later

How do I get this type of mortgage?

Like with any kind of financing for your home, you should meet with a mortgage broker. Brokers are a one-of-a-kind resource that you need to have at your disposal when shopping for a mortgage. They understand the ins and outs of the Canadian lending landscape and work for you to ensure you get the right mortgage package and the best available interest rate.

No matter what financial situation you may find yourself in, a broker can guarantee that he or she will find a mortgage to suit your needs.