It all depends on your plans and how much risk you are willing to
accept since your rate
is fixed for the duration of the term.
In general, the
longer the term, the higher the mortgage rate, and the lower the risk.
This protects you against potential rate hikes. If you want to keep
the home for many years, and you do not want to renegotiate your rate,
a longer term may be the best fit for you.
Your risk
tolerance should be higher if you opt for a shorter term, as interest
rates could fall and save money, but could also increase as your term
matures. If you want to sell the property or want to have the
opportunity to renegotiate the rate and terms of your loan, a shorter
term would be a better option for you.
Hesitating between
the two?
Know that you can also benefit from a
tailor-made rate that combines a fixed and variable rate for more
flexibility. Talk to your mortgage
advisor, who will help you choose the best option.
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