15-Year Fixed Mortgages Rates

15-year fixed mortgages in Canada

Most mortgage terms in Canada don't exceed 10 years, but of course there are exceptions. The 15-year fixed mortgage rate is one of them, and means that your interest rate is locked in for a full 15 years.

It's very rare for a borrower to choose a 15-year fixed mortgage since a minority of people under the age of 50 remain in their home for that long. That significantly increases the likelihood of needing to break the mortgage early, which would entail a potentially large prepayment penalty.

This term is one of the longest in Canada and is currently only offered by Sunrise Credit Union in Manitoba.

Pros and cons of a 15-year fixed mortgage rate

There are very few people who would opt to lock in a rate for 15 years, aside mostly from investors. But one of the benefits of an extra-long mortgage term is the security of knowing that the mortgage payment and interest rate will remain stable for the duration of the term.

The downside of locking in a rate for such a long period is the rate premium. That long-term price stability comes at a steep price compared to the lowest rates currently available for shorter terms. The premium for a 15-year fixed mortgage can be more than two percentage points higher than the best 5-year fixed rates, for example, which translates into much more interest being paid out over the term.