Can short-term mortgage rates save you money in Sudbury?
Are you buying a home, or is your mortgage up for renewal? Then you’re likely looking at the current state of mortgage rates, wondering which term length and rate to choose — especially with a Bank of Canada ‘rate pause’ finally afoot.
The 5-year fixed rate, usually the most popular choice for his clients sporting a low-risk appetite, now carries the added risk of paying a higher rate for longer. Peter also advises clients that “if they’re already used to that payment amount and can manage to keep it as-is when they renew, their interest savings will go directly toward their mortgage principal. They’ll pay off their loan years quicker to save even more on interest costs."
That's why Peter says he supports his clients “both with short-term decisions and the long-term picture" for the best mortgage-savings strategies to help them reach their financial goals.True North Mortgage brokers, on the whole, have seen a dramatic change in their clients choosing shorter terms during the past 6 months. They’ve seen an over 44% increase for the 1 and 2-year fixed-rate mortgage terms, and an over 140% increase in those going with 3 and 4-year fixed-rate mortgage terms.
The downside of a shorter term? If rates keep going up, you’ll pay a higher rate sooner. We’re all crossing our fingers that we’re coming into rate drops, not more hikes, after our central bank’s fastest tightening cycle ever.A shorter-term strategy may offer you a middle ground to average out more savings over the life of your mortgage.
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