This magical time of year creates a wonderful caring attitude.
In the spirit of the holiday season, I wanted to take this opportunity to wish you and your family a very Merry Christmas and all the best for 2011!
The Great Debate over Extended Amortization
Should the government cut the maximum amortization from 35 years to 25 years?
According to TD Bank CEO, Ed Clark - most definitely! He feels that " ... in a world in which low interest rates and excess liquidity has created asset bubbles all over the world", we should be proactive in making sure that we don't create a problem here in Canada.
There was speculation around the idea that the government's Finance Department might cut the amortization to 25 years earlier this year. You may recall the government cut the maximum amortization from 40 years to 35 years amidst the sub-prime crisis. This strategy was adopted to give consumers a of confidence that the government was protecting our financial well being.
While the interest paid over the life of the mortgage is much higher with a 35 year amortization, the average Canadian pays off their mortgage in 1/2 to 2/3 of their original amortization period (according to insurer sources). There are some great examples of borrowers who are well suited to the 35 year amortization:
Read The Great Debate over Extended Amortization
(Excerpts taken from Canadian Mortgage Trends)