13 January 2012 ~ 0 Comments

Is it Goodbye 30 Year Amortization for Mortgages?

Over the past few weeks it seems that almost every economist or executive from the big five banks in Canada has come out and expressed that the federal government should eliminate the current 30 year amortization back to the previously 25 year maximum (remember earlier last year it was 35 years that was eliminated).

Recently TD economist Craig Alexander was quoted as saying

“If we see the housing market surprise on the upside and debt growth surprise on the upside, then the government will likely   take action to further tighten mortgage insurance rules,” TD Bank economist Craig Alexander said. “Quite frankly, if you can’t afford a mortgage at 25 years versus 30, then you probably shouldn’t be buying a house in the first place.”

I guess when it’s in the banks best interest they come out and make statements like the one above.  If the concern is so high, then why haven’t they been saying this over the past 3 or 4 years? Or better yet…why have they not come out strong and lobbied against the federal government when they introduced the 30 year, then 35 year and even 40 year amortization!

It’s called covering their own asses!! This way they can say “see, we tried to warn you”!

Last time I checked it was the big five banks who dole out the money to consumers for mortgages, lines of credit, loans etc. In the past 3 years I’ve personally received three calls from my bank offering to refinance my mortgage. Come on who is the pusher here?!

For those who are financially responsible and who are thinking of refinancing at today’s great interest rates or if a move is in your near future, you might want to make  a quick call to your mortgage broker (or mine) and lock in the 30 year amortization for who knows how long it will be around.

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