The longest mortgage term Canada Mortgage and Housing Corporation will insure is 30 years, but is the longest possible period the way to go?
The longest mortgage term Canada Mortgage and Housing Corporation will insure is 30 years, but is the longest possible period the way to go?
Already, the vast majority of home buyers opt for a shorter-term mortgage - usually 25 years -- exchanging slightly higher monthly payments for long-term saving.
A shorter amortization means a bigger monthly payment but also big savings on interest payments. For example, on a $400,000 mortgage with 6-per-cent interest rate, shortening the amortization period from 30 years to 25 years would increase the monthly payment by about $180 but would save about $88,000 in interest over the life of the loan.
