• What do you mean clients are now considering a longer amortization of 30 years?

    Don’t the banks frown on longer amortizations?

    Don’t clients know it will cost them more in the long term?

    Working in the Canadian housing and Mortgage industry for many years, many trans have come and gone. An action in the world causes a reaction. In this case a pandemic has allowed Mortgagors to think differently. Although my observations are not scientifically proven, it’s an internal trend that we are now to spot in the Hamilton Wentworth mortgage market. To better analyze why, I went to my existing client base to seek their answers. These themes seem to prevail.

    Changing philosophy

    Whoever thought a pandemic would hit in 2020. This virus has changed how people are thinking. Canadians are thinking life is short, divorce rates are going up, and clients are thinking paying a mortgage down quickly is not a high priority. Having greater cash flow and living life is.

    Price is going up

    No matter what the government says, prices keep going up. Do not believe me, go to the grocery store or try buying a home. The problem is that incomes are not increasing proportionately. Dollars need to be spread out further and further, letting the mortgage go to 30 years allows better breathing room.

    Long road back for jobs

    There is complete non-direction for the economy and stable work. Clients are refinancing while they are working in order to improve their debt situation and to much-needed renovations. With job satisfaction weak, Clients are seeking the cheapest payment and longest amortization.

    Rates are low

    The silver lining with the coronavirus is that mortgage rates are historically low. With the changing philosophy, continued higher prices, and they need to get their financial house in order, mortgage rates are accommodating the need for cash flow and setting up a low payment.

    The COVID-19 scare has been amazing in changing how life will be different. Canadians financial goals is a big part on the thought process on how they want to live and how they want to pay their bills. Paying off your principal residence will probably not be one of the four most goals. Living with simplicity will be.

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