The Big Story: Loss of 30 year amortization
There's growing speculation the government's next move to slow down the market will be forcing banks to ditch 30- and 35-year amortizations on conventional mortgages. Brokers weigh in on the Big Story.
Video transcript below:
Reporter: Is big brother at it again? If he is, the amortization period for conventional mortgages is his target. We all want a soft landing. Will this move create more havoc than harmony in the market? Cutting amortization is this week’s Big Story.
Shorter amortizations, is this the key to a safer housing market? Canada’s banking watch dog thinks so. The loss of 30 and 35 year amos for conventional mortgages may only affect a few. But will it affect the broker’s bottom line?
Anne Brill, Centum Metrocapp Wealth Solutions Inc.
Anne Brill: The loss of 30 and 35 year amortizations on conventional mortgages is, it’s actually very relative to this day and age. Years ago we were doing 25 year amortizations, but the rates were significantly higher. Today our rates are a lot lower, so people do qualify for a 25 year amortization even on conventional deals. So it’s not, it hasn’t made a big impact on our business.
Reporter: The market has slowed considerably. Will slowing it down more harm or help?
Joe Walsh, Mortgage Broker, Bedrock Financial Group Inc.
Joe Walsh: I think that the government is just putting one more foot down on trying to slow down the market and what they’ve got is, they’ve got great interest rates out ther, they can’t slow down the market where they’d like and they are using these things. So I don’t think it’s a huge thing but you know it’s one more thing that they are doing. So it’s not a good thing.