After “What is your best rate?” the next most popular mortgage question is probably “Which term do you recommend?” — or a variation thereof.
But it’s tough to generalize about the best mortgage because borrowers have unique needs. To get around that, we have to use limiting assumptions and make a best guess at the risk/reward of each term. And that’s how we’ve picked the stars and dogs in this week’s Globe column.
OK let’s rephrase that. It’s not the time for a 10-year fixed for well over 90% of Canadian mortgagors.
There was a time last year when the spread between 10-year and 5-year fixed rates was below 3/4 of a percentage point. That made even the 10-year scoffers among us rethink our positions. But spreads are now back over 1%. That means 10-year terms simply aren’t worth the interest premium anymore (for all except the most payment sensitive borrowers).