”Canada’s federal mortgage insurer is not in favour of extending the maximum amortization period for new mortgages, arguing that measures to cut monthly payments would also stoke demand and spur higher home prices.”
”Canada’s federal mortgage insurer is not in favour of extending the maximum amortization period for new mortgages, arguing that measures to cut monthly payments would also stoke demand and spur higher home prices.”
”Currently, borrowers have a maximum of 25 years to pay down their mortgage if they make a down payment of less than 20 per cent of the property’s purchase price. They are also required to pay for mortgage insurance, which protects banks from losses if borrowers are unable to pay their mortgage.”
”Although some borrowers with variable-rate mortgages have seen their amortizations temporarily grow beyond 25 years as interest rates have risen, Canada Mortgage and Housing Corp. chief executive Romy Bowers says she is not looking to make expanded mortgage terms a permanent feature for new buyers.”
“It’s better to focus on increasing the supply versus making it easier for people to borrow more money,” Ms. Bowers told The Globe and Mail. “We feel, from a policy perspective, it’s probably not the best move in a supply constrained environment.”
“Ms. Bowers said increasing the amortization period for insured mortgages would create more demand for housing and increase the purchasing power of individuals, which would just get “capitalized into the cost of housing.”
”The maximum amortization period is 30 years for a borrower who makes a minimum 20-per-cent down payment on the purchase price of their property.”
Source: To read the full article published on The Globe and Mail website click the link HERE
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