Advertised fixed mortgage rates for both three- and five-year terms have been hovering around the same level for weeks, but the former may come with more pricing flexibility right now.
Five-year mortgages are traditionally the safer bet; however, Victor Tran, a mortgage broker with Tango Financial, said three-year mortgages are currently more popular. Nine of his past 10 clients opted for them.
One major reason is because some lenders have more negotiating room for those shorter-term rates.
It’s not always clear why, but Mr. Tran said one major lender in particular has been offering discounted three-year terms for his clients with balances of about $800,000 or more.
“With those large loans, I’m getting better pricing on a three-year fixed,” Mr. Tran said.
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Three-year mortgages also offer some flexibility for clients who are considering selling or refinancing soon and want a better chance of avoiding penalties for breaking their mortgage term, he said.
Fixed mortgages on a three-year term were also popular two or three years ago for different reasons. Mr. Tran’s clients were choosing three-year rates in 2022 and 2023 under the assumption that interest rates were about to drop and they would be able to get a much lower rate upon renewal.
That bet paid off, and Mr. Tran said mortgage rates today reflect a normal level that they’ve hovered around in recent decades.
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Mortgage rates are sourced by Ratehub.ca. For a comprehensive list of today’s mortgage rates for each term/type, visit ratehub.ca/best-mortgage-rates.
Ratehub.ca is a mortgage-rate comparison marketplace and mortgage brokerage. It helps millions of Canadians compare and obtain the best mortgage rates, credit cards, insurance, deposits and loan products.
Rates shown are the lowest available for each term/type and category (insured versus uninsured) as of market close on Thursday.
