Why we've locked in to a 10-year mortgage
As new homeowners, we want to make sure that we are not cash-strapped in case of unexpected expenses. On the other hand, we want to pay down this enormous debt as quickly as possible. That’s why we considered the down payment, amortization, mortgage term and interest rate, and pre-payment privileges very carefully.
With the possibility of rising interest rates on the horizon, many homeowners are taking advantage of today's low mortgage rates and locking in at ten year terms. This article from Moneyville explores the many reasons choosing a longer term is beneficial.
The most prominent reason most choose a ten year term is the peace of mind it offers. The security of knowing your payments will stay the same for the next ten years is extremely important, and makes the household budget much easier to maintain.
Choosing the amortization period is just as important. A shorter amortization means paying less interest in the long run, but a longer amortization may give your monthly budget some necessary breathing room.
Another benefit of a ten year mortgage is the ability to increase the amount or frequency of your mortgage payments, or make lump sum payments. This ability allows you to pay your mortgage off faster, and shorter term mortgages don't always offer these options. For more information about the many options available to you, speak to a qualified Mortgage Broker.
To read the full article from Moneyville, click here.