Because interest rates on mortgages are low, I can afford a larger mortgage than if rates are higher. But if I take out a 5-year fixed mortgage, I don’t want to be stuck with a house I can’t afford in 5 years if the rates go up. So, what is the general rule for choosing a maximum mortgage amount?
I’ve never heard of a 5 yr mortgage and if you can afford to pay off a house in 5 yrs, you should just save your money for 5 yrs and pay cash and save the mortgage interest
If you’re spending more than 40% of your take home pay on the mortgage and taxes, then it’s too much
If you are getting a fixed rate mortgage then it does not matter if the rates go up, your mortgage payment will stay the same no matter how many years you finance it for.
References :
I’ve never heard of a 5 yr mortgage and if you can afford to pay off a house in 5 yrs, you should just save your money for 5 yrs and pay cash and save the mortgage interest
If you’re spending more than 40% of your take home pay on the mortgage and taxes, then it’s too much
References :