In today’s uncertain economic climate, getting a short term mortgage is a move that many homebuyers are taking. While the amortization period doesn’t change, a short-term mortgage allows you to renegotiate your mortgage in light of changing interest rates. While a short-term mortgage may not appeal to homeowners looking for stability and peace of mind, it is good for those who are more cognisant of economic conditions. What are some of the benefits of a short-term mortgage?



If you expect interest rates to fall within a short time period, then a short-term mortgage allows you to renegotiate in light of the lower interest rate once the current mortgage expires. You can change houses if your circumstances change or there is a housing boom. For investors, a short-term mortgage allows one to “time” the housing market. Once you have found a favourable rate, you can lock into that rate over a longer period.


Because you can take advantage of lower interest rates, you will have more savings. You can then use the extra money to invest in other vehicles such as stocks and bonds, or you can use it to buy another home. You will also avoid the stiff penalties that come with longer term mortgages should you choose to break it.

Business Friendly

Businesses and self-employed homeowners might find short-term mortgages appealing because of the flexibility it offers in light of changing circumstances. For seasonal business owners and people with unsteady income, it might be better to have a short-term mortgage that provides them with choices when faced with a new business environment.

Recession Friendly

In bad economic times, going short term allows you to take advantage of the lowest rates possible. If you believe that the interest rate will continue to fall due to deflation then it is best to take advantage of the free fall using short-term mortgages.

Is it For You?

Short-term mortgages are not for everyone. If you prefer peace of mind and want to avoid the hassle of renewing every year, then short-term mortgages may not be for you. But if you like to take risks and have a good appreciation of the market, then it is a good option.

Short-term mortgages bring many advantages to those who are suited for them. It brings flexibility, savings and additional investment options for those who are more savvy. If you are thinking about taking a short-term mortgage, then talk with our mortgage agents to see if it is right for you.