With interest rates at historic lows, Canadian homeowners and buyers are eagerly locking in new mortgages. They just have to decide: for how long?
The amortization, on the other hand, is the total number of years it will take to pay off your mortgage. The most common amortization in Canada is 25 years. Over that span of time, you will spend multiple terms with various lenders — or keep renegotiating with the same lender, if you want. Lengthier terms usually come with higher rates, because you’re protecting yourself from big interest rate hikes for a longer period of time. It’s not always so simple, though; sometimes market conditions will see lenders charge a premium for a shorter term.“The answer is different for every homebuyer,” says Jesse Abrams, co-founder and CEO of Homewise, an online mortgage brokerage based in Toronto.
None! With the real estate crash coming one should just wait and buy for half of the price later.