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40-Year Am’s Supporting The Market

Supporting-Canadas-Housing-Market Higher mortgage costs are slowing Canadian housing starts.  If it weren’t for long-term amortization, however, the hit would be much bigger.

RBC economist Derek Holt says, “It’s my belief we would be 10 to 20 per cent below 200,000 housing starts next year if it wasn’t for the impact of these mortgage innovations.” 

Holt estimates that 30% of all new insured mortgages are for 40 years.  60% are for over 25 years.  Until recently, a 25-year amortization was the Canadian standard.

Borrowers beware: The interest on a long-am mortgage will sting if you don’t make extra pre-payments.

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Last modified: April 25, 2014

Robert McLister is one of Canada’s best-known mortgage experts. A mortgage columnist for The Globe and Mail, interest rate analyst and editor of MortgageLogic.news, Rob has been covering Canada's mortgage market since 2007.

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