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3, 5, or 10 years? How to decide which mortgage term is right for you?

July 11, 2022 | Posted by: Marc Crossman

Choosing a term is one of the most important decisions you’ll make entering Canada’s scorching housing market.



The best advantage of a 3-year is a shorter timeline in case the long-term strategy for your mortgage is unknown. They usually come with lower interest rates, but lenders offer lower rates on shorter-term mortgages as a way of balancing out your risk of facing a higher rate when the term ends.



Higher interest rates come with a 5-year term. It’s the trade-off for having two extra years of stability. The predictability of your mortgage payment for the next 60 months can be pretty enticing for homeowners on a budget. Agreeing to a 5-year term means if you need to sell your home, transfer your mortgage or break your contract, you could be on the hook for a colossal penalty.



A 10-year is relatively safe if you won’t move or sell in the foreseeable future. The confidence that your payment won’t increase for a decade is considerable, and something 5 and 3-year terms don’t provide. Breaking this contract within 5 years could trigger a massive prepayment penalty that dwarfs those for shorter terms.


Once you’ve determined which mortgage term is best for your financial needs, you’ll be better prepared to compare what lenders are offering. Call to discuss which term may be best for you at 780 701 3888 or email


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