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Wednesday, March 22, 2006

35 years to life

No this isn't a prison sentence. If you are a first time homebuyer, it may feel like one though. It is not uncommon in Europe for mortgages to be generational and the way housing prices are going in the Edmonton area this well help some buyers get into the escalating market whilst maintaining some sustainable payment level.

Friday, March 17, 2006
PATRICK BRETHOUR - From Friday's Globe and Mail

CALGARY — The 35-year mortgage has arrived in Canada, giving overstretched first-time buyers the chance to plunge into the heated real estate market -- for the long term. But it might just mean that they end up making the last payment from their Canada Pension Plan cheques.

In Canada, the 25-year mortgage has been the standard maximum, but the rapid escalation of housing prices has now shattered that previously ironclad limit. Genworth Financial Canada said yesterday that it will start insuring 35-year and 30-year mortgages, trumping a move by larger rival Canada Mortgage and Housing Corp.

CMHC said three weeks ago that it would begin to insure 30-year terms. Both firms charge fees to insure low down-payment mortgages provided by financial institutions, but do not lend money directly.

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