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- Jun 26, 2002
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I understand your lending policies are different in Canada.
You can say that again. 30 million Canadians who think they live under a free market economy have a choice beetween 6 banks.
In the states we can lock in a very low rate for 30-40-50 years. Consider that at 5.5%, a payment on a $300,000 loan would only be about $1600. And that's mostly tax deductable. $1,600 may seem like a lot to someone now, but in 10 years they will most likely be ecstatic that they have that same monthly payment. I understand in Canada you can't go more than about 7 years on a loan. There's a lot of risk there that would certainly work to keep prices from going to high. If that 5.5% loan became 10%, your payment might look more like $3,200 per month.
There are some 10 year mortgages with highly unatractive rates. However there is no tax deduction on your mortgage unlike many states.