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Should I take a short-term mortgage or a long-term mortgage? |
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It depends on your unique situation. Short-term mortgages tend to have slightly lower interest rates, but the rate is locked in for a shorter amount of time, so you will be subjected to higher interest rate risk because you might have to renew at a higher rate when your term is up. Long-term mortgages are usually higher rates (but still competitive) compared to short-term mortgages, but the rate is locked in for longer, so if interest rates increase you won’t necessarily have to renew at that higher rate (at least until your term is up). A general rule of thumb is that if interest rates are low, you should choose as long of a term as possible, and if rates are high, you should choose shorter terms (so you can get the lower rate if rates decrease). Most of our clients are currently choosing to go with 5-year mortgage terms because rates are relatively low.
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