term: The most competitive fixed rates are offered on a 3-year, 4 yr. or 5 yr term. Once you commit to a lender for a term there will be a penalty to pay it off early. On a fixed rate lenders will charge 3 months' worth of interest or use a mathematical formula called Interest rate differential (IRD) whichever is greater. If you lock into a fixed rate and rates drop the IRD penalties can be severe. I've seen some of the chartered bank's charge over $20,000 in penalties. If you think the chances are high that you may sell before your term is up than a variable rate should be considered as the penalty is only 3 months' worth of interest at any given time throughout the term.
Amortization
I think a good goal is to pay off your mortgage before retiring so understand your amortization. Most mortgages are amortized over 25 years. A good strategy is to pay your mortgage biweekly rather than monthly. This will knock about 5 years off your mortgage, and you won't even notice it. As mentioned before, imagine not having a rent or mortgage payment at some point in the future when you are either about to retire or are retiring. The biggest mistake people make is they build equity then re finance their property to purchase something that loses value. A good rule to follow is only borrow for assets that go up in value, don't borrow for anything that loses value. I'm a big fan of taking equity out of your first property to buy an investment property. Its good leverage and done correctly you can have several properties paid off by the time you retire. The decision to buy a home would put you into a realm full of things you have not dealt with prior, especially if you used to rent. Owning a house or condo brings a whole new experience. Know your numbers so you don't end up house poor. Property taxes, mortgage principal/interest payment, & condo fees if
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