Monday, May 18, 2015

Longer-Term Mortgages Gaining Popularity

The majority of Canadians (74%) would opt for a medium-term or longer-term mortgage if they were to acquire, refinance or renew a mortgage today, according to a CIBC poll. That includes 27% who think now is the time to look beyond the traditional 5-year fixed mortgage for a term of up to 10 years.

  • 47% would choose a medium-term mortgage (three or five years) if they were to acquire, refinance or renew a mortgage today
  • 19% would go with a shorter term (one or two years)
  • 62% of Canadians with a mortgage believe it will be at least 10 years before they are mortgage-free, making it possible to choose a longer term such as a 10-year fixed rate
Benefits of a longer-term mortgage:

While a longer-term mortgage may not be right for everyone, locking in to a medium- or longer-term fixed-rate mortgage can reduce the stress that can come with following interest rates.

This shift to longer-term, fixed-rate mortgages signals growing interest among Canadians to gain greater control and certainty over their largest financial obligation. With a consistent and predictable mortgage payment at today’s low rates guaranteed for many years, they may have the opportunity to pay down their mortgage faster and minimize interest costs, which will help to keep them on track for their broader financial goals.