Yet, despite its prevalence, qualified borrowers owe it to themselves to think outside the five-year fixed. A little extra risk can sometimes yield a lot more reward.
Fixed five-year mortgages are especially popular in uncertain/rising rate markets (like today’s). People who can’t afford rate risk, and those who cannot qualify for shorter terms, often choose a five-year fixed by default.
Even individuals with rock-solid financial resources frequently gravitate to five-year terms. Much of the time that’s because they don’t want to over think the safety of a longer-term mortgage. In other cases, it’s because no one has ever shown them how much five-year fixed terms really cost over the long run.
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