| Monday, 15 November 2010
A client’s mortgage term can have a bigger impact on interest cost than the upfront interest rate because the term dictates how long the consumer is locked into that rate.
CanadianMortgageTrends.com updated its Mortgage Term Review for November 2010, and wrote that the term “affects how long you’ll overpay or underpay, relative to the other available options. The wrong term can get mighty expensive if interest rates deviate from your assumptions, or if you need to break your mortgage early.”
The site noted the following key developments since its August Mortgage Term Review:
Economic growth concerns have peaked for the year and slightly subsided
The 5-year bond yield, which leads fixed mortgage rates, fell to an 18-month low then strongly rebounded
The prime rate rose 25 basis points to three per cent
Fixed mortgage rates hit another all-time low
The current deep-discount market rates for a five-year fixed range from 3.39 to 3.49 per cent, while the variable rate sits at prime minus 0.75 per cent
Visit CanadianMortgageTrends.com for its complete breakdown of the most common mortgage terms.
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