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Ah, that's interesting and subtly different from the way it works in the US. The most common mortgage loan here is simply a 30-year fixed rate loan. We do have
by 0xffff2 7y ago
Ah, that's interesting and subtly different from the way it works in the US. The most common mortgage loan here is simply a 30-year fixed rate loan. We do have 3 and 5 year fixed loans, but they just revert to a floating rate after the fixed term so there's no presumption that you have to get a new loan at the end of the fixed term even though it's often a good idea. Those loans have also fallen out of favor substantially since 2008. Are full-term fixed loans not a thing in Canada?
- toast0 7y agoMy understanding is that this style of loan, balloon payment mortgage, used to be common in the US too, but government intervention in the form of Fannie Mae loan purchases made the 30-year fixed loan widely available. As a borrower, there's a big risk with a balloon payment that you may not be able to find financing when it's due, so having a full term loan is very desirable.
- UnFleshedOne 7y agoNope, 5 years is a maximum term you can get for residential mortgages, fixed or variable, with 25 years amortization most commonly (so you'll renew it at least 4 times). Maybe there are other weird types of mortgages but they are usually not available for individuals I think.