Do you want to subscribe to a mortgage for 5 years or 60 months? Find out how to get the best rate.
The best fixed rates for a home loan are close to 1%. The shorter the loan term, the lower the credit rate. Subscribing a short loan can therefore benefit from a favorable interest rate.
To take out a mortgage on 5 years or 60 months: what advantages?
The choice of a mortgage in the short or long term depends on the borrower and the bank. Two main factors are taken into account: the debt capacity and the loan amount. Indeed, the shorter the repayment period, the higher the monthly payment. The borrower must be able to ensure the payment of his monthly payments while keeping a significant remainder.
Subscribing a credit over 5 years or 60 months brings several benefits. First, it allows for a more attractive rate because banks consider that short-term loans are less risky than long-term loans. Then, by borrowing over a reduced period, the capital is paid more quickly and the interest amount is much lower than the capital repaid.
However, the short term loan may not match your real estate project and the high monthly payments impact your purchasing power. Thus, it is important to clearly define your project and compare rates before committing yourself. The choice of a mortgage over 5 years can for example be justified if you want to make a rental investment.
Tips for getting the best rate for a 5 year or 60 month mortgage
To obtain the lowest rate, it is essential to build a solid file. These tips will help you benefit from favorable financing conditions.
Highlight the strengths of his record
To get the best rate for your mortgage over 5 years, check that your file contains all the supporting documents requested by the bank. Do not hesitate to highlight the level of your income, your professional stability, your ability to save and possibly the amount of your personal contribution.
Focus on important criteria
If negotiating a low rate and ancillary fees is essential, other elements can be debated such as penalties in case of early repayment, the modularity of monthly payments depending on your budget or the borrower insurance. You will rarely get the best deal on all of these criteria. Better then favor the most important according to your project.
Play the competition
Real estate credit is an important customer acquisition tool for banks. To find the best offer of real estate credit over 5 years or 60 months, do not hesitate to play the competition. Rather than contacting the banks one by one, you can use an online comparator that will offer offers tailored to your needs. Using a real estate broker can also help you get the lowest rate.