6-year fixed rate mortgage

Constant interest rates and payments for a period of 6 years. The 6-year fixed rate mortgage is a medium- to long-term product, Naturally, it’s tied to medium- and long-term Government of Canada bond yields, usually the 5- or 7-year bond.

Of course, the term of the mortgage is not to be confused with the amortization period; the former refers to the length of time you are bound to pay your lender an agreed upon interest rate and adhere to the provisions of the contract; the latter is the amount of time it will take you to pay off the entire loan. Most amortization periods are 25 years.

Sandwiched between the popular 5- and 7-year terms, few borrowers opt for the 6-year fixed rate mortgage. The 6-year term is longer than other popular options, but competition among lenders remains low. Not surprisingly, these rates tend to be significantly higher than those for 5-year terms. Nonetheless, many major financial institutions, like TD and BMO, continue to offer 6-year fixed rate mortgages.

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