My first piece of real estate was a downtown condo that I bought directly from the builder. I went with the standard five-year fixed-rate mortgage as it just seemed like the thing to do.
When I sold the condo and bought a house, I decided against going with the same bank and used a mortgage broker instead. The broker recommended that I take a seven-year term and I liked the idea of knowing how much money I would spend on mortgage payments. To me, the peace of mind was worth the slightly (at the time) higher interest rate.
I know that some borrowers think that potentially paying a higher rate for the sake of one’s own comfort level is too high a premium to pay. But according to this article, when taking interest rates from the past decade into account, the average interest rate over a ten-year period of time averages out to the same as a five-year term.
Of course, there are many strategies in the mortgage world. Talking to a trusted mortgage professional and looking at the numbers to find your own comfort level is essential in finding the right mortgage for you.
