25-Year vs 30-Year Mortgage
Friday - May 3rd, 2024
Should I Choose a 25-Year or 30-Year Mortgage in Canada?
When it comes to choosing between a 25-year and a 30-year mortgage in Canada, many factors come into play. Hi, I’m Jarrett White with Whiteridge Mortgage, and today, we’ll explore which option might be better for you.
First, let’s clarify what amortization is—it’s the time it takes to pay off your entire mortgage. In Canada, if you put down less than 20%, you’re required to take an insured mortgage with a maximum 25-year amortization. But with more than 20% down, you can opt for a 30-year mortgage.
Some may think that a 25-year mortgage is better because it saves on interest, but in most cases, a 30-year mortgage is actually the better choice. Here’s why:
A longer amortization means lower monthly payments, allowing you to borrow more. Lenders use a debt-to-income ratio to determine borrowing limits, and lower payments mean you can qualify for a higher mortgage amount.
Concerned about paying more interest over the term? Don’t be. Most mortgages offer prepayment privileges, allowing you to pay down the principal faster. You can match the 25-year mortgage payment with a 30-year mortgage, effectively turning it into a 25-year mortgage. This flexibility is valuable if financial circumstances change.
A lower minimum payment also makes it easier to buy investment properties. When qualifying for a mortgage, minimum monthly payments of all debts are considered. A lower mortgage payment means you can qualify for more when buying an investment property.
The 25-year mortgage has one advantage: typically, a 0.10% lower interest rate. However, this can often be waived, and some banks offer similar rates for both 25-year and 30-year mortgages.
In conclusion, the 30-year mortgage offers more flexibility and borrowing power, making it a better choice for many. If you’re considering a mortgage, contact me for expert advice on your situation. Thanks for reading, and I’ll see you in the next one!
EXCELLENT61 reviews on
Courtney Saxbee2024-04-04Jarrett and Kait were wonderful to work with, they were quick to respond, always kept us in the loop on where our application was, explained all of our options, and they got us a very good mortgage rate! Nothing but good things to say about them and I would highly recommend them to everyone.
kapil pant2024-03-28I had an exceptional experience working with Jarrett as my mortgage broker. His dedication to his job is evident in his proactive approach to finding the best solutions for his clients. Jarrett was always available to offer guidance and support, and his ability to explain the complexities of mortgages in a clear and understandable manner was very valuable. I highly recommend Jarrett to anyone in need of a knowledgeable and reliable mortgage broker.
Chrissie Robinson2024-03-22My husband and I were so happy we chose to work with Jarrett and Kait at Whiteridge. Our situation was a bit more complicated than the straightforward mortgage and both Jarrett and Kait thoroughly explained every small detail and thoroughly answered all our many (MANY!) questions. They even created personalized videos to answer our questions showing charts and examples for a visual. This really helped us understand our situation better. Jarrett even secured us the best rate we’d seen in months. We really could not have been happier working with Jarrett, we highly recommend Whiteridge!! Thank you Jarrett and Kait!
Gurveer Singh2024-03-19I have been working with Jarrett White for a while now and every single client we have worked with together has been extremely happy with his services. He is easily the top Langley Mortgage Broker, the process from start to finish is very streamlined and clear communication through every step of the mortgage process. I will continue to work with Jarrett and highly recommend you to do the same!
hannah serka2024-03-08I truly could not have gone through the home buying process without Jarrett & Kait. As a first time home buyer the process can be very stressful & overwhelming. Jarrett & Kait were both SO amazing helping us & making sure everything was done on time and done correctly. I must have called them over 100 times in the whole process & they were more than happy to help me at any time of the day, and I never felt like I was bothering them and asking to many questions. They truly are there to help. Jarrett is soooo knowledgeable and just genuinely good at his job. 100% recommend them both. I cant thank you two enough !!! we are SO happy in our new home!! :)
Matt Matusiak2024-01-21I had an outstanding experience working with Mr. White and his team during the purchase of my first property. From start to finish, everything went seamlessly. His expertise, professionalism, and dedication made the entire mortgage process stress-free. I highly recommend Mr. White and his team for their exceptional service.
Scott Van Delft2023-11-10Had a great experience with Jarrett and his team. Patiently worked with my wife and I through our mortgage application. Always communicating and keeping us updated and genuinely a nice guy to deal with. I will definitely use them again and highly recommend.
Keith Mew2023-09-29I reached out to Jarrett to help renew my mortgage. After experiencing some challenges with the lender Jarrett went above and beyond to make the situation right for me. I highly recommend using Jarrett for your next mortgage.
Christine Z2023-09-27We used Jarret White and his team to secure a mortgage for our recent investment property. He got us a great rate and was able to get an extension when our closing was delayed. This saved us several thousand dollars as the rates had climbed. Communication with him and his team ( Kait Olsen) was prompt and professional. They also went above and beyond dealing with the bank when the documentation they were requesting became unreasonable. I would highly recommend Jarrett and his team.
