Over the last few months, variable rate mortgages have lost their luster as discounts off of the 3% prime rate are shrinking or disappearing altogether. Financial institutions have lowered rates for four or five year mortgages to as low as 2.99%.
Enter the Great Pumpkin. Not a legendary being invented by Linus, but rather a new mortgage product - the 10-year mortgage. The Canadian Association of Accredited Mortgage Professionals says 10-year mortgages are about 1% of the marketplace right now - but that may change as rates for the decade - long term have dropped to an all-time low with some lenders said to be offering an interest rate of 3.99%.
The decision on whether to go 5 or 10 should be based on your risk tolerance. In other words, how big would you like your security blanket to be? While variable rate mortgages represent the highest risk (because of floating rates), the 10-year term represents the ultimate in security - but with a higher premium.
Get all the facts. Work with an Accredited Mortgage Professional to understand which product is right for you. "Because after all, happiness is a warm blanket, Charlie Brown." By the way, I think Linus would have chosen the 10 year term for sure.What industry professionals chose.
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