What are 5-year fixed-rate mortgages?

Among the most trending mortgage rate options, a 5-year mortgage rate is often the best option to manage you seeking a new home with quality management of mortgage payments and amortization calibrations. All that matters is this option of mortgage plan is to lock 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.

Not to deny that this option acts as 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.

When the mortgage rate is 'fixed' with the option of 5 year fixed rate mortgages, the rate fluctuates with the market interest rate, known as the 'prime rate.'

For example, if the 5-year fixed mortgage rate is 4%, you will pay 4% interest throughout the mortgage term.

An exciting feature of the 5-year fixed mortgage rate is that all borrowers must meet its approval standards even if they choose a mortgage with a lower interest rate and shorter term. This benchmark is applied to reduce risk for the lender and give the borrower some breathing room.

Today, if you are looking to grab all insights on the 5-year fixed rate mortgages online, never hesitate to connect RateShop.ca! Today, they stand as the "top independent brokerages in 2020" as recognized under Canadian Mortgage Professional mortgage firm.