23 ms·

Dunno about Canada, but in the US a fixed-rate mortgage is, well, fixed. My rate will never change, and thus my monthly payment will remain exactly the same fo

• otoburb 15y ago
  Canada is distinctly different than the US. I was also surprised when I realized this difference. The scary part of this all is that even though folks with good credit were able to taken advantage of full-term fixed rate mortgages (i.e. prime borrowers), the US still endured the housing bust long after the majority of the sub-prime borrowers defaulted. I'm not sure about other Commonwealth countries, but Canada definitely does not have this option. Our mortgages have a specific mortgage rate term (usually 3-5 years), separate from the life-time of the mortgage (usually 20-30 years; the 35 was/will be no longer be available). This means that interest rate fluctuations are more devastating when they rise for those who put little to no money down on their expensive housing purchases in Canada recently.
  • gonepostal 15y ago
    There are longer then 3-5 year mortgage terms in Canada. I believe up to 15 years is commonly offered. Amortization length of a mortgage can be up to 35 years for residential mortgages. 35 year amortizations were only eliminated for CMHC/insured mortgages. I would contend that the system is more stable when borrowers are forced to consider the consequences of future interest rate increases.