How Long Is My Mortgage Rate Good For?
When you complete an application for a new mortgage, in most cases, the mortgage interest rate offered to you can be held for 120 days. After that period, your mortgage rate will depend on the kind of mortgage you choose: a fixed-rate mortgage or an adjustable-rate mortgage.
In a fixed-rate mortgage, your interest rate will remain the same for the entire length of the mortgage, rather than being subject to what is called a "float" or "adjustment." This means your mortgage rate will be good for the entire life of your mortgage.
Fixed-rate mortgages have different loan terms: 30-year fixed-rate mortgages are the most popular, followed by 15-year mortgages. Other mortgage terms are rare. However, borrowers who take out smaller mortgages may want to pay them off more quickly. On the other hand, borrowers with good credit and low loan costs can sometimes choose to extend the loan repayments to 40 or 50 years, ensuring relatively low monthly payments.
Tellus TIP:
In the United States, fixed-rate mortgages are the most popular type of mortgage. In other countries like Canada, the United Kingdom, and Australia, adjustable (or variable) loans are standard.
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