What Do You Need to Take Care Before you Get a New Home with the Best 5 Year Fixed Rate Mortgages?

Whether you are looking forward to building your home or start the renovation work, you might need a mortgage loan to support your finances. Not to deny that it’s required for individuals to pay heed to seek the lowest mortgage rates in Canada that often stand at 1% to 3% from the top-rated banks and credit unions. However, what matters more is how you make use of the right type of mortgage type. When it comes to options, the best 5 year fixed rate mortgage in Canada are the option to support you.

Today, when you consider 5-year mortgage rates in Canada, it represents the mortgage term that shouldn’t be confused with the amortization period. The mortgage term is the length of time you lock in the current mortgage rate, while the amortization period is the amount of time it will take you to pay off your mortgage. The term acts like a reset button on your mortgage, at which point you must renew the mortgage at a rate available at the end of the term. So, for example, a typical mortgage has a 5-year term and a 25-year amortization period.

The question comes on what things you need to take care of before applying for a new home with the best 5-year fixed-rate mortgages.



·         When the mortgage rate is fixed, it means that the rate is set for the term, whereas with a variable mortgage rate, the rate fluctuates with the market interest rate, known as the 'prime rate.' So, for example, if the 5-year fixed mortgage rate is 4%, you will pay 4% interest throughout the mortgage term.

·         The best 5-year fixed-rate mortgages are the ones that allow all property borrowers that they check on how they meet its standards of approval even if they choose a mortgage with a lower interest rate and shorter term. This benchmark is applied not only to reduce the risk for the lender but also to give the borrower some breathing room.

Final Thoughts

Obtaining a new home under the best 5 year fixed rate mortgages is not easy but impossible either. So today, if you are looking to grab the entire top guide on this option in Canada, connect RateShop.ca for more information. Not to deny that today they stand as top independent brokerages in 2020 as recognized under a leading mortgage firm “Canadian Mortgage Professional.”

 

 

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