I’m always a little skeptical when I see the term “expert” in an op-ed title these days, but in this case he seems to know what he is talking about.
“I’ve had many clients with amortizations, that are 70, 80, even 90 years remaining, in the extreme cases, and that’s simply because their payments are not going towards any principle at all,” he said.
“It’s mainly because the payments are strictly just paying interest to the bank, they’re not paying down any of the principal payment at all.”
Many of these same “experts” are getting worried about infinite mortgage amortization, but it’s unlikely anything will be done about it for one simple reason: monetary authorities fear a 2008 style wave of mortgage defaults far more than they fear 90 year mortgages. These authorities previously assured us that only good things can come from zero percent interest rates, and unfortunately a large portion of the population believed them.
If the amortization periods are extending out that far, then the payments are not even covering the interest. That sort of idiocy is what led to the housing crash in the US during the Great Financial Crisis. Lenders should stop ‘whistling past the graveyard’ and do their jobs………foreclose.
In former times I believe we called these home occupiers SERFS.
So effectively you have a lease and the residual will tidied up when you die and the place gets solved. Any still owing? not your problem.
It is little different than cars. I have always paid cash and kept long term, but most people on the road have leases and might not even qualify for a bank loan.
I seriously hate push button non-keys.
Are interest only mortgages offered by the big banks in Canada?
We pay for everything until we die and then even after that. No such thing as a free lunch.
This is so much better for Canada and Canadian Banks than offering a fixed rate 30 year mortgage isn’t it?!?!