5 Year Fixed Rate Mortgage
You’ve found that house and now it's time to decide what mortgage rate fits your budget and your lifestyle so you have two options - a fixed or variable rate mortgage. Today I will break down the most common type of mortgage - a fixed-rate mortgage.
Below are some questions to ask yourself based on your individual situation and preferences:
Do you prefer to know exactly what your payment is going to be over a longer period of time?
Do you prefer to follow a monthly budget with little or no allowance for variances?
Do you expect to have no changes to your living situation in the next 5 years?
If you answered “yes” to any of these questions, possibly a more conservative fixed-rate mortgage could be the better choice for you. We also know with life it can throw a few curve balls such as job transfer, an unexpected pregnancy, not-so-nice new neighbors, and divorce which could cause you to break your mortgage and move. So now, what are your options?
With a fixed-rate mortgage, your mortgage is a closed mortgage which means a penalty will apply if you payout your mortgage mid-term. This penalty can be a 3 months interest penalty or an IRD penalty, whichever is greater for a fixed-rate mortgage and may cost more than a variable rate mortgage, ask me for more information on this topic. If you are in a situation where you may be planning to sell the house and move to another property, I can help you to decide if you should Port your current mortgage to avoid the payout penalty or whether there is another option that might work to your advantage.
As your mortgage professional, I will compare your options and help you decide which option is best for you and your circumstances, goals, and tolerances.
Contact me for the best 5 year fixed rate mortgage option for you.