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What is the best term for mortgage?


John Liles
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Hi all, I am currently planning to buy a new house and was in a bit of research about the type of mortgages and interest rates that are offered by banks. I think my credit score is OK and that would not cause any problems while going for a mortgage.

The thing which is worrying for me is the interest rate, what if the interest had a sudden increase in the years to come. Then I will have to pay more than what was planned and this causes instability and with that, if I wish to cancel or transfer my mortgage there are mortgage penalties which I will have to pay further.

So with all this in mind, what are your thoughts on the best term to choose? Are most people going with a 5-year term? Thanks for your advice!

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I know Canada is different from the USA so most of us cannot say. A 5 year term is pretty fast for those of us in the USA but might be normal for Canada.

Also, it should be known that Canada does not have a tax deduction for mortgage interest like the USA so the fastest term that the the homeowner can afford to pay off would be the best path to go.

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  • 1 year later...
19 hours ago, DylanRussell said:

The 30-year term is the more traditional choice, but there are advantages to the 15-year mortgage, depending on your financial goals.

1) This is an old post.
2) The OP is from Canada so they have different mortgage structures than the USA. That is why I did not provide a direct answer.

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