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Great Canadian housing bailout: How real estate unaffordability is being propped up (nationalpost.com)

submitted 2 years ago by [email protected] to c/[email protected]

21 comments fedilink hide all child comments

I'm surprised we've seen basically nothing from provincial or federal governments to improve housing/rental affordability. With riding interest rates, I was expecting at least a slump, but that hasn't happened. Instead, we've seen amortizations grow rapidly.

The Office of the Superintendent of Financial Institutions has recommended

Removing the ability to extend amortization periods could exert downward pressure on some house prices, as it reduces the options available to help some borrowers meet their financial obligation

But (AFAIU) Parliament has ignored the recommendation. It's a really shitty situation, that I don't see a way out of.

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[–] [email protected] 8 points 2 years ago* (last edited 2 years ago) (4 children)

In recent months, all of Canada’s big banks have reported a vast expansion in the number of mortgages on their books with amortization periods of 35 years or longer.

Holy shit. Longer than 35 years? Like... People are buying a home at 30 and not planning to pay it off until age 70?

That's absolute insanity. I get that payments are rising with interest rates, but holy hell.

Then again, I've heard of so many people having their rentals sold out from under them that maybe I'd take a 40-year amortization if it was the only way to afford payments on buying a house. I can't imagine being forced to move year after year with kids, yet I literally met a guy who's had that happen to his family earlier this week.

[–] Tgnome 6 points 2 years ago* (last edited 2 years ago) (2 children)

Ya, 35+ years is a long time. I worked on mortgage application software for a bit for a major bank a few years ago and I don't remember amortization periods being able to go past 30 years.

Edit: Holy shit, 25% ish of the major banks mortgage portfolios is of mortgages with 35+ year amortization periods.

[–] [email protected] 9 points 2 years ago* (last edited 2 years ago) (1 children)

Up to 35% already for CIBC's customer base. Funny how our life expectancy went down down 2 years in a row, but our amortization periods keep going up. Almost like another disaster waiting to happen for our economy. ___

[–] [email protected] 2 points 2 years ago

I mean, considering COVID, are you surprised?

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