Boon or Bane
Genworth Corp. /CMHC (mortgage insurers) have agreed to issue first mortgages with amortizations up to thirty 35 years,The rationale is that this will open up the opportunity for more Canadians to own their own home. It will also enable buyers in areas of Canada where prices could be considered astronomical to be able to afford a home. In cities such as Vancouver, Calgary and Toronto a starter home is in the quarter of a million price range, the average family cant afford to enter the market.
How will this help? Lets look at the numbers:
| $150,000.00 @ 5.25% - 25 year amortization | $ 894.00/ month |
| Total interest cost of borrowing | $118,162.26 |
| Minimum income requirement $32,500.00/year | |
| Total interest cost of borrowing | $206,459.90 |
|
Minimum income requirement $28,000.00/year
|
Looking at it from a different viewpoint a payment of $895.00 allows the borrowers/buyer to obtain a mortgage of $180,000.00 @ 5.25% over 35 years. So therefore the consumer can obtain a mortgage $30,000.00 greater enabling them to purchase a higher priced home.
Although the cost of monies over the 35 years is substantially larger than 25 years, this does not have to be. By utilizing yearly pre-payment privileges and through opportunities to increase your payments, also by opting for weekly or bi-weekly payments, a borrower can effectively reduce the pay back period to 25 or even 20 years, thereby having your cake and eating it too.
CIR MORTGAGE CORP. has these products available.
Rates For
Fri, Jul 30, 2010
6:05 am
| 1 Year (Closed) | |
| CIR: 2.70 | Bank: 5.65 |
| 1 Year (Convertible) | |
| CIR: 2.70 | Bank: 5.65 |
| 1 Year (Open) | |
| CIR: 2.70 | Bank: 5.65 |
| 2 Years | |
| CIR: 3.45 | Bank: 3.65 |
| 3 Years | |
| CIR: 3.5 | Bank: 4.1 |
| 4 Years | |
| CIR: 3.89 | Bank: 5.24 |
| 5 Years | |
| CIR: 4.19 | Bank: 5.80 |
| 7 Years | |
| CIR: 5.15 | Bank: 6.0 |
| 10 Years | |
| CIR: 5.49 | Bank: 6.19 |
