A long term mortgage is a mortgage with a term greater than 5 years. It means that you keep the conditions of your current mortgage contract for a longer period of time, such as 10 years. But what is a long term mortgage good for? Here are some benefits of choosing a longer-term mortgage over a shorter one. <\/p>\n\n\n\n
By locking in an interest rate for an extended period, you eliminate the uncertainty of future rate fluctuations. This is particularly valuable when interest rates are low, as you can secure favorable financing for the entire loan term. This can make budgeting and financial planning easier, as your housing costs will remain predictable and stable. <\/p>\n\n\n\n
In Canada on investment properties, mortgage interest is tax-deductible<\/a>. This means that the interest portion of your mortgage<\/a> payments can be deducted from your taxable income, reducing your overall tax liability. A long-term mortgage typically involves a higher total interest cost, which can result in greater tax savings over the life of the loan. However consult with a tax professional to understand the specifics in your location. <\/p>\n\n\n\n A mortgage requires you to make regular payments, which gradually reduce the loan balance and increase your equity in the property. This can be an effective way to create a disciplined savings plan, as the mortgage acts as a form of “forced savings.” Over time, this can help build wealth and provide a sense of financial security. <\/p>\n\n\n\n Inflation erodes the purchasing power of money over time, which can lead to increased living expenses. However, with a fixed-rate long-term mortgage, your monthly payments stay the same, regardless of changes in inflation. <\/p>\n\n\n\n As a result, your housing costs will become a smaller proportion of your overall expenses as time goes by, potentially freeing up more disposable income for other needs or investments.<\/p>\n\n\n\n Real estate properties often appreciate in value over time due to factors such as population growth, economic development, and supply-demand dynamics. By holding a long-term mortgage, you have the opportunity to benefit from this appreciation, as the equity in your home increases. <\/p>\n\n\n\n This can lead to a higher net worth and potentially significant profits if you choose to sell the property in the future. <\/p>\n\n\n\n As you can see, there are many benefits of a mortgage loan with a longer term than 5 years. However, this does not mean that a long term mortgage is right for everyone. You should consider your situation, goals and preferences before deciding on the best option. <\/p>\n\n\n\n That\u2019s where Amrita Bhogal Mortgages<\/a> comes in. Whether you are a first-time home buyer<\/a>, new to Canada, looking for an investment property<\/a> or wanting to tap into your home equity, our best agents can help you find the best solution for your situation. We will guide you through the complex mortgage process and provide you with personalized advice and service. <\/p>\n\n\n\n Feel free to contact us today! <\/p>\n\n\n\n <\/p>\n\n\n\n3. Forced Savings <\/strong><\/h3>\n\n\n\n
4. Inflation Protection<\/strong><\/h3>\n\n\n\n
5. Potential for Appreciation<\/strong><\/h3>\n\n\n\n