Date Posted: April 18, 2023
Q: There's been some rumors about a 40 year amortization. Is that going to happen?
A: I don't think so. It doesn't feel like it. Certainly, OSFI has no interest in making it easier for Canadians to get mortgages just yet. We went through a traumatic, in their eyes, a traumatic period where too many Canadians took mortgages that maybe once interest rates started to go up, they really couldn't handle. So they want to make sure that that doesn't happen again.
Q: Why is my bank asking me to renew one year from my maturity when my interest rate is substantially better than the rates they're offering me now?
A: It’s a retention tool, there is no other common sense logical explanation to it other than to try and get the client to stay with them for an additional four years. So if they have a year left, you know, sign up for a new five year. I would caution Canadians maybe to think twice about doing that and think a third time, because really every single bank economist has predicted for interest rates to come down over the next 6 to 12 months.
Q: How can we get more information about mortgage relief programs that are available?
A: Anybody that bought with less than 20% down the default insurers all have plans in place to assist Canadians. So what they can do is things like maybe interest only payments for the next three months, six months. And if you remember when COVID started, we had that pause in payments for 3 to 6 months. All those programs are available if you apply for them. So if you're really suffering through some hardship, inflation's got the best of you. Maybe you've had a job loss or anything else has happened. Reach out to your institution first that's got your mortgage. And if they're not giving you any solutions, then ask the institution to tell you which default insurer. There's three of them out there, there’s CMHC, Sagen and Canada Guarantee.
For more information, reach out to a Mortgage Broker today!
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