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Amorition8/29/2023 ![]() ![]() ![]() “If you just have 30-year amortization everyone’s mortgage payments will go down by $200 and they can actually afford the house, but if you’re in a supply-constrained market and that’s your solution, it’s not going to solve the problem in the long term,” she said.ĬMHC says the focus right now must be on increasing the number of available homes, since a shortage is what’s driving prices higher. “What I worry about is sometimes that seems like a quick fix,” said Bowers, of the possibility of extending amortizations. Critics counter that a longer amortization means higher interest costs over the mortgage’s lifetime, which means you build home equity more slowly. Proponents of longer amortization periods argue they give borrowers more flexibility and helps them balance their monthly budgets. However, a borrower whose down payment is at least 20 per cent of the purchase price can have a maximum amortization period of 30 years. Under Canada’s current regulations and lending standards, borrowers must pay down their mortgage over a maximum 25 years if their down payment amounts to less than 20 per cent of the home’s purchase price. “It lowers the monthly payment, but it actually increases the cost to the homeowner over time.” “That just makes credit more available,” she told The Canadian Press. president and chief executive Romy Bowers is not in favour of allowing borrowers to repay their mortgages over longer periods of time. TORONTO - The head of Canada’s housing agency says measures such as extending mortgage amortizations and changing the threshold to qualify for an insured mortgage are not the answer to the country’s housing affordability challenges.Įven though homeowners have seen a rapid increase in what they are paying to cover mortgages as interest rates have risen, Canada Mortgage and Housing Corp. ![]()
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