7 and 10 Year Term Mortgages Looking Attractive During Uncertain FutureThe housing industry is showing signs of gaining momentum heading into spring. What does this mean for the future of interest rates? Currently mortgage interest rates are at all time lows however these rates will most likely start to increase in the near and long term future. In the future it is uncertain how high interest rates will go and for how long the interest rates will stay at these high levels. One way to combat this uncertainty is to choose a longer term mortgage. Most people choose the 5 year fixed term because of its low rate but the 7 and 10 year terms have decreased as well. If you choose the 5 year fixed term, upon renewing in 5 years time interest rates could be quite a bit higher than the rates are today. By choosing the longer terms of 7 or 10 years allows you to put off that renewal date an additional 2 to 5 years offsetting the uncertainty of your new mortgage rate and payment. With a 7 or 10 year mortgage you will still be faced with a renewal date. The extended term gives you the opportunity to pay down your mortgage balance further so even if mortgage rates are high at the time of renewal your mortgage principle balance will be lower. Currently the best 7 year fixed term offered is 5.00% with the 10 year fixed term as low as 5.25%. These are amazing rates for the length of the term. Choosing these terms would allow peace of mind that your mortgage payment will not change for 7 or 10 years. If you are currently in the stage of refinancing, renewing, remortgaging or purchasing and are considering taking a longer term mortgage please call us today.
There are a couple of myths when it comes to longer term mortgages:
1) I will not be able to move from my home if I choose a 7 or 10 year mortgage without facing a large penalty.
- This is incorrect. You have the ability to move anytime you wish without paying a penalty. Most lenders allow you to port or transfer your existing mortgage to your new property. Also if you need additional funds to purchase your new home a blended interest rate could be calculated depending on the extra funds required as well as current mortgage interest rates and terms available.
2) I cannot payout the mortgage faster if I choose a 7 or 10 year term.
- This is incorrect. You will have the same ability to make extra lump sum payments, double up payments and even increase your monthly payments as per the lenders guidelines. If your mortgage is paid out early using the lenders prepayment privileges (ie. if you have a 10 year fixed term and you end up paying the mortgage out in 9 years), then no penalties would apply.
If you currently have a mortgage, your mortgage is coming up for renewal, or you are currently looking to purchase a property and are concerned about future interest rates. Please call us today and inquire about the 7 and 10 year term mortgages available to help ease your concerns. Please contact Betty at 403-532-3927, e-mail email@example.com, Kevin at 403-589-3021, firstname.lastname@example.org or at our website: www.yourmortgagecontact.com
Also please tell anyone you know that may be looking to purchase, refinance or early renew their mortgage as it may give you an opportunity to receive a $1,000 gift certificate of your choice. Click Here or open the attachment to find out further details.
Please click here if you would like to make any comments about the current or past newsletters as we appreciate any feedback. Also watch for our new and improved website in Spring of 2009.