Long-term mortgage rates have dropped to the lowest point in Canadian history. It is expected that many more people will be locking in their mortgage at this time.
The Bank of Montreal became the first major Canadian financial institution to bust through 3%, with its 2.99% closed fixed rate mortgage for four years. Others have now followed suit.
If a discounted five year term isn’t long enough for you, some lenders have weighed into the current mortgage discussion by offering a 10-year fixed rate product at just 3.89%. The added bonus of having a term longer than five years is that under Canadian law, after half a decade, you can break your mortgage for as little as three months’ interest penalty. Your payment will remain the same for 10 years which is great financial stability and you still have all of the options of prepayment that you would with a shorter term.
The argument of whether to lock in or not has never been stronger since there is no guarantee these deals will be available in two years.