Use the tools below to copy the article in plain text form, or you can copy it as HTML, ready to copy and paste directly into a web page.
HTML <html> <head> <title>The “5 x 5” home loan strategy (hypotheque) - (Renew 5 year fixed loan 5 times)</title> </head> <body> <h1>The “5 x 5” home loan strategy (hypotheque) - (Renew 5 year fixed loan 5 times)</h1> <div class="info">Author: <a href="author_1_94064.html">Gregory van Duyse</a></div><div class="body">Why the “5 by 5” (5 ans fixe) mortgage strategy (renewing a fixed rated five year mortgage five times)?<br /> This strategy is a common mortgage strategy, probably the most common in Canada, though not in the rest of the developed world. <br /> As a matter of fact, many people think that this is the way all mortgages are designed, and that the only choice they have in a mortgage is to try to get the best interest rate.<br /> <br /> Why is this strategy (terme 5 ans fixe) so popular? It’s difficult to say; but perhaps because it is the same strategy that we are accustomed to and that our parents and everyone else we know has. Besides this, the big banks advertise this strategy the most, probably because it is the most advantageous for them. You can be sure if it is beneficial for them it is not beneficial for you!<br /> <br /> Description<br /> <br /> What exactly is the “5 by 5” strategy? As you may be able to tell from the name, it means you take a mortgage out on your home for five years, at a fixed rate, and then you renew it at the end of the five year period.<br /> If you visit any lender or call any mortgage consultant and ask for the best mortgage rate available, they will automatically give you the rate for the five year fixed rate mortgage, even if you did not specify that kind of loan.<br /> <br /> Advantages<br /> <br /> -Available all mortgage lenders<br /> -A lot of competition for this interest rate<br /> -Payments do not change for 5 years<br /> -The strategy is very easy to understand<br /> -No adjustment in interest rate until the end of the term<br /> <br /> <br /> Disadvantages<br /> <br /> •At the maturity of the loan, you will have a new current rate, and you have to renew at that rate<br /> •The possibility exists that you will have a major increase in mortgage payments every five years<br /> •If you try to pay your mortgage down before the maturity date, there will be stiff fines<br /> <br /> <br /> Is there a case when the “5 by 5” strategy does pay? <br /> Yes, if you think that interest rates – taux hypothecaire - will be lower at the end of the five year period. However, the chances of interest rates being lower at the very time that you need to renew your loan would be very coincidental. <br /> <br /> If you believe that interest rates will be higher at the end of the five year term of your loan, the strategy you should choose is the long term strategy. If you believe that rates will be stable, or go down, you should choose the variable rate strategy. And, if you are like most borrowers and are not sure which way interest rates are going, there is a strategy for you as well. (Get in touch with us and we can explain this to you.)<br /> <br /> If you know for a fact that you will be moving in exactly five years, or if you know you want to refinance your homein exactly five years, or if only five years remain on your loan, the “5 by 5” strategy may be the one for you.<br /> <br /> Be sure that you do not choose your mortgage just because it is like everyone else’s home loan or because it is the only one your bank makes available to you. Make sure you examine all of the home loan options available to you, and that you work with a mortgage – hypotheque - consultant who understands and can present the different choices to you.<br /> It’s your choice!<br /> <br /> Gregory writes articles for <a href="http://www.informezvous.com/" >http://www.informezvous.com/ - Pret hypothecaire.</a> To have more information about mortgages, please visit one of his websites: <br><br /> <a href="http://informezvous.com/hypotheque/strategie_hypotheque_5_par_5.html" >http://www.informezvous.com.com</a></div> <div class="source">Article Source: <a href="http://www.articlealley.com/article_133613_19.html">http://www.articlealley.com/article_133613_19.html</a></div> <div class="author"> <div class="authorBio"></div> </author> </body> </html>
Text The “5 x 5” home loan strategy (hypotheque) - (Renew 5 year fixed loan 5 times) Author: Gregory van Duyse Why the “5 by 5” (5 ans fixe) mortgage strategy (renewing a fixed rated five year mortgage five times)? This strategy is a common mortgage strategy, probably the most common in Canada, though not in the rest of the developed world. As a matter of fact, many people think that this is the way all mortgages are designed, and that the only choice they have in a mortgage is to try to get the best interest rate. Why is this strategy (terme 5 ans fixe) so popular? It’s difficult to say; but perhaps because it is the same strategy that we are accustomed to and that our parents and everyone else we know has. Besides this, the big banks advertise this strategy the most, probably because it is the most advantageous for them. You can be sure if it is beneficial for them it is not beneficial for you! Description What exactly is the “5 by 5” strategy? As you may be able to tell from the name, it means you take a mortgage out on your home for five years, at a fixed rate, and then you renew it at the end of the five year period. If you visit any lender or call any mortgage consultant and ask for the best mortgage rate available, they will automatically give you the rate for the five year fixed rate mortgage, even if you did not specify that kind of loan. Advantages -Available all mortgage lenders -A lot of competition for this interest rate -Payments do not change for 5 years -The strategy is very easy to understand -No adjustment in interest rate until the end of the term Disadvantages •At the maturity of the loan, you will have a new current rate, and you have to renew at that rate •The possibility exists that you will have a major increase in mortgage payments every five years •If you try to pay your mortgage down before the maturity date, there will be stiff fines Is there a case when the “5 by 5” strategy does pay? Yes, if you think that interest rates – taux hypothecaire - will be lower at the end of the five year period. However, the chances of interest rates being lower at the very time that you need to renew your loan would be very coincidental. If you believe that interest rates will be higher at the end of the five year term of your loan, the strategy you should choose is the long term strategy. If you believe that rates will be stable, or go down, you should choose the variable rate strategy. And, if you are like most borrowers and are not sure which way interest rates are going, there is a strategy for you as well. (Get in touch with us and we can explain this to you.) If you know for a fact that you will be moving in exactly five years, or if you know you want to refinance your homein exactly five years, or if only five years remain on your loan, the “5 by 5” strategy may be the one for you. Be sure that you do not choose your mortgage just because it is like everyone else’s home loan or because it is the only one your bank makes available to you. Make sure you examine all of the home loan options available to you, and that you work with a mortgage – hypotheque - consultant who understands and can present the different choices to you. It’s your choice! Gregory writes articles for http://www.informezvous.com/ - Pret hypothecaire. To have more information about mortgages, please visit one of his websites: http://www.informezvous.com.com Article Source: http://www.articlealley.com/article_133613_19.html About the Author:
return to article
