Why short terms show up so often at B
From the lender's side, pricing risk for an uncertain one- or two-year period is easier than committing to five years of the same pricing. From the client's side, a shorter term matches the reality that many B clients reasonably expect their situation — income documentation, credit, ratios — to improve within that window.
What 'short' typically looks like
B terms are commonly one to two years — materially shorter than the five-year term common in A lending — though the exact length is negotiated deal by deal and isn't a fixed rule across the market.
The renewal-or-refinance decision at term end
At the end of a short B term, the borrower typically renews with the same lender (possibly at adjusted pricing), refinances to a new lender — B or, ideally, A, covered in Module 08 — or, in a worst case, has no clear path and faces a forced renewal on whatever terms the lender offers. This is exactly why exit planning starts on day one, not in month twenty-three of a two-year term.
Why a short term without a plan is the real risk
The danger in B lending was never really the higher rate — it's a borrower reaching the end of a short term with the same structural problem that put them at B in the first place, and no improved file to present to a new lender.
The broker's job during the term
Check in with the client well before renewal, track whether the original reason for being at B has actually improved, and start the A-lender conversation early enough that a real exit is possible rather than a last-minute scramble.
