5-Year Fixed Mortgage Rates Ontario can vary based on financial institution. We have compiled a list of the best 5-year fixed mortgage rates currently offered in Ontatio from Banks and Credit Unions.
5-Year Mortgage Rates Ontario
Before you understand how 5-year Mortgage Rates Ontario work, know that the 5-year term is different from the amortization period. For instance, say, the amortization period is 25 years. This period is the time within which you’ll clear the mortgage payment. However, the 5-year plan is the term for which you’ll pay the agreed interest rate that can be either fixed or variable. At the end of this time, you can work out a new interest payment plan with your lender.
Understanding 5-Year Fixed Mortgage Rates Ontario
Should you opt for the 5-year fixed Mortgage Rate Ontario, you’ll agree on a fixed rate of interest that you’ll pay for 5 years irrespective of the market rates. These interest programs are much preferred on Canada, and they offer you many advantages.
- Once you agree on the interest rate, you should not worry about having to make uncertain payments that could make it difficult for you to budget your expenses.
- Fixed Mortgage Rate Ontario plans are typically lower and thus, more favourable for you if you’re looking to make payments on a long-term basis.
- If you have no intention of selling or refinancing your home within the next 5 years, this plan is ideal.
- You can always opt for the variable Mortgage Rate Ontario plans or any other fixed rates that may be for periods of 1 year to 4 years. However, your lender will require you to prove that you can make payments according to the posted 5-year fixed rate. This rate is typically at least 2 percentage points higher than the interest rate for the 5-year fixed Mortgage Rate Ontario.
- You can choose to buy the 5-year Mortgage Rate Ontario plan during the market phase when interest rates are low.
- You can have a fair idea of the expected interest rates because these figures vary according to the earnings from government bonds.
- When you switch to a 5-year Mortgage Rate Ontario, you can expect that your lender will offer to cover the legal and appraisal fees involved. However, this facility is not extended to a mortgage linked to a line of credit or collateral charge mortgage. You’ll have to get them refinanced when you find a different lender.
Opting for 5-year fixed Mortgage Rates Ontario can have downsides too:
- You’re likely to incur a higher penalty if you should choose to terminate the plan ahead of schedule. That’s because these penalties are calculated according to the posted rates that banks have in place of actual rates.
- Typically fixed Mortgage Rates Ontario are more expensive and have higher interest rates as compared to the variable Mortgage Rates Ontario. Though, the markets have noted a downtrend in the last 30 years or so.
Here’s some added information you might interesting:
- About 75% of mortgage seekers opt for the payment plan with fixed rates in place of variable rates.
- There aren’t any significant differences in the interest rates between the fixed and variable plans and may only be about 0.5%.
- You might find that around 50% of mortgages have terms for 5 years depending on the year when they are taken.