About one out of every five home loans at three big Canadian banks are now negatively amortizing, which happens when years get added to the payment term of the original loan because the monthly payments are no longer enough to cover anything but the interest.
Can you imagine the total cost for home ownership in a 47 year mortgage?
30 year mortgages around 3% were something like 175% of the loan price. Even that seems crazy
This is insanity
They are basically making it a generational purchase. Like your parents buy a home and then on their death bed, pay it off and hand you the key.
Can’t wait till it’s like 200 years 🙃
In addition to comparing against cost of rentals, there’s also opportunity cost with investing. If someone has a mortgage averaging 3-6%, and invests at 5-10%… that’s a great strategy. Why wouldn’t you push the amortization as long as possible?