Choosing The Right Mortgage: Short- Or Long-Term?

Not all mortgages are created equal, and the best option for you depends on a variety of factors. For instance, should you choose a short-term mortgage or a long-term loan?

SHORT-TERM MORTGAGE
A mortgage with a term of less than three years is a smart choice if you anticipate needing a new loan sooner rather than later (if you’re going to move again in the near future, for instance), or if you think that interest rates might drop. Choosing a shorter term for a closed mortgage could help you avoid a hefty prepayment charge if ever you decide to pay your mortgage off early or cancel your loan.

LONG-TERM MORTGAGE
If you don’t plan on changing your mortgage for several years, you could opt for a long-term loan. This option makes budgeting easier because you’ll always know how much each payment will cost you. If you get a great deal on a fixed-rate mortgage, a longer term means you’ll be enjoying that low interest rate for quite some time. To make an informed decision, seek advice from a mortgage broker or lending institution.

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