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From Short to Long: Selecting the Ideal Mortgage Term

By February 14, 2024 February 20th, 2024 No Comments

One of the most crucial decisions you’ll make when securing a mortgage is choosing the term of your loan. The mortgage term not only influences your monthly payments but also determines the overall cost of your homeownership journey. In this guide, we’ll explore the pros and cons of short and long-term mortgages, helping you make an informed decision that aligns with your financial goals.

Is a Short or Long-term Mortgage Better?

Short-Term Mortgage Terms:


1. Lower Interest Rates: Short-term mortgages often come with lower interest rates compared to their long-term counterparts. This can result in significant interest savings over the life of the loan.

2. Faster Debt Repayment: With a shorter term, you’ll pay off your mortgage faster. This means you’ll own your home outright sooner and save on overall interest costs.

3. Build Equity Quickly: Rapid debt reduction means you build home equity more quickly. This equity can be advantageous if you plan to sell or refinance in the near future.


1. Higher Monthly Payments: The main drawback of a short-term mortgage is the higher monthly payments. While you’ll save on interest in the long run, the immediate financial strain might be challenging for some borrowers.

2. Reduced Affordability: The higher monthly payments can limit the amount you can borrow, potentially reducing the affordability of the homes you can consider.

Long-Term Mortgage Terms:


1. Lower Monthly Payments: Long-term mortgages typically come with lower monthly payments, making them more manageable for many borrowers. This can free up cash for other financial goals.

2. Greater Affordability: The lower monthly payments associated with long-term mortgages may allow you to qualify for a larger loan, increasing your purchasing power.

3. Financial Flexibility: Long-term mortgages provide more financial flexibility. Lower monthly payments leave room in your budget for other investments, savings, or unexpected expenses.


1. Higher Overall Interest Costs: The primary downside of a long-term mortgage is the higher overall interest costs. While monthly payments are lower, you’ll end up paying more in interest over the life of the loan.

2. Slower Equity Building: With a longer term, the rate at which you build home equity is slower. This can be a consideration if building equity quickly is a priority for you.

Choosing the Right Term for You:

1. Consider Your Financial Situation: Assess your current and future financial situation. If you can comfortably afford higher monthly payments and want to save on interest in the long run, a short-term mortgage might be suitable.

2. Evaluate Future Plans: Consider your long-term plans. If you anticipate moving or refinancing in the near future, a short-term mortgage might align with your goals. If stability and long-term homeownership are your priorities, a longer term could be more suitable.

3. Consult with Mortgage Professionals: Seek advice from mortgage brokers and financial advisors. They can help you understand the implications of each term based on your unique circumstances and guide you toward the option that best fits your needs.

In conclusion, choosing between a short and long-term mortgage involves a careful evaluation of your financial priorities and future plans.

By weighing the pros and cons of each option and seeking professional advice, you can make an informed decision that aligns with your homeownership goals.

Whether you opt for the faster repayment of a short-term mortgage or the financial flexibility of a long-term mortgage, the key is to choose the term that suits your individual circumstances and helps you achieve your homeownership dreams.

Contact the mortgage broker team at Agentis today to arrange your no-obligation consultation. You’ll benefit from Whole of Market access and advice that helps you achieve your property goals for now and in the future.


David Mortell

David Mortell

David is Ce(MAP) and Ce(RER) qualified and has 14 years’ experience delivering top-rated mortgage and financial advice.In 2014, David took the plunge and started Agentis Financial & Mortgage Solutions with award-winning mortgage broker, Christine Long. Agentis has now become the brokerage of choice in and around Peterborough. David is also a director at our sister company, Agentis Wealth.