The 10-year term in Canada is pretty rare these days (less than 1% of mortgages in Canada have a term 10 years or longer), but a 10-year term below 4% is unheard-of. Or, at least it was until last week.
Gone are variable rates with “prime-0.9%” discounts (now they’re hovering right around prime which is currently holding steady at 3%), in are the 10-year fixed rates as low as 3.84%.
With rates pretty much as low as they have ever been, there’s no place for them to go but up. For a lot of people, locking in for 10-years at under 4% just makes a lot of sense. Not only does a 10-year term give you peace-of-mind and cost certainty for a whole decade, but it’s less than 1% above prime, and less than 1% above a 5-year term. To quote Rob Carrick of the Globe and Mail, “It’s like freezing time at the exact best moment ever to finance the purchase of a house.”
Now with rates this low (especially the 5-year 2.99% “specials” floating around), you’re going to want to make sure to read the fine print. A lot of these specials are filled with restrictive contracts (can’t break the mortgage early, low pre-payment options, etc.). As always, my advice is to get in touch with your favorite mortgage broker – we can help walk you through the various options out there, and help you decide the best one for you. Some people wouldn’t want to be locked in to a mortgage for 10-years, while others would sleep better at night knowing their mortgage payments will be exactly the same until 2022. 😉
