4-year rate specials have started coming down the pipe recently. For those looking for a 5-year fixed mortgage, you may find some value by giving up a year of “security.”
Most 5-year fixed mortgages are in the neighbourhood of 5.65% to 5.79% at the moment. However, if you’re open to a 4-year term there are a few lenders below 5.40%. Assuming a 1/4% interest rate difference, the interest savings is roughly $1900 after 4 years–based on a $200,000 mortgage with a 25-year amortization.
Is that worth giving up a year of rate assurance? Quite possibly.