Do you remember this email headline from last Summer?
Is now the time to Consider a 10 Year Mortgage?
At that time 10 year mortgage rates bottomed out at 3.69% and bounced around the 3.99% level for a little while after that. It was truly a GREAT time to choose a 10 Year term..
Today the best 10 year rate available is 4.39%. In that same time period, the 5 year rate has also moved up from a low of 2.89% to as high as 3.59% (now at 3.39%, and some specials a bit lower than that).
So .... the question is, do the numbers still make sense to choose a 10 year option over 2 consecutive 5 year terms?
As many of you know - I will always defer to the numbers - the nice thing about them, is that they don't lie and they are not emotional. I like that a lot!!!!
So here are some numbers:
According to a recent article in Canadian Mortgage Trends, 5 year rates would have to increase by 2.5%+ over the next 5 years (that would be a rate of 5.79%+) to make the 10 year option a better choice today.
(click here to read the full article)
When compared to the numbers from the Summer, the second 5 year term only had to top 4.69% for the 10 year option to NOT be the better choice.
So the question goes back to you - 'Do you think 5 year rates will be higher or lower than 5.79% in 5 years time?'. That's the only question you really have to ask, if making that choice for yourself.
When asked what is the one thing I do differently as a mortgage broker - one of my first responses it that 'I want to reduce the clutter and make things simpler for my clients'. What I mean by that is, with all of the information available today - internet, friends, parents, colleagues, our own crazy minds - it's hard to get a clear picture of your unique options and what is truly the best choice for YOU. I consider it my job to make those options / that choice as clear as possible. Essentially - I want to make your decision EASY.
"Knowledge is a process of piling up facts; wisdom lies in their simplification."
~ Martin H. Fischer ~
If I can simplify some thoughts or decisions for you - I'm always just a call or an email away.
Sally Hazel, AMP
Tel: (250) 870-7060