What is the term of the mortgage?

The term of a mortgage refers to the length of time a borrower agrees to the terms and conditions of the loan with the lender. Common mortgage terms can vary widely, often ranging from one year to several decades.

In this case, a three-year term is notably significant because it represents a typical option offered by lenders, allowing borrowers the flexibility to reassess their financial situation and the market conditions relatively frequently. A three-year term can also balance payments over time with market interest rates, which can vary, enabling borrowers to refinance or renegotiate their mortgage at the end of this term if they choose to do so.

While longer terms like five or ten years are not uncommon, they may lock in a rate for a longer period and could carry different financial implications. Thus, a three-year term is often considered a practical choice for many borrowers who prefer a shorter commitment while still maintaining stability in their financial planning.