John Liles

What is the best term for mortgage?

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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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