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5-Year Fixed Mortgage Trap
The average Canadian wastes $22,000 after tax during their life for every $100,000 of their mortgage and takes 38 months longer to pay it off, according to a study by Moshe Milevsky.
This is because of taking 5-year fixed mortgages instead of variable.
They are marketed as being safe and a good protection against a sharp rise in interest rates.
The reality, though, is that they are nearly always a huge waste of money, because the interest rate is nearly always higher and you lose your negotiating power for five long years.
From 1975-2019, 1-year fixed mortgages saved money 100% of the time…
The skinny
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