CMHC launches mortgage pilot
30-year mortgages available
Canada Mortgage and Housing Corporation (CMHC) will be offering homeowner mortgage loans amortized up to 30 years as part of a pilot project in what it says is an attempt to improve access to home ownership and choice for Canadians.
The four-month pilot – which begins March 3rd and runs until the end of June 2006 – will be available through any lenders who wish to participate in the pilot. CMHC will assess the pilot results and then determine whether this will be a permanent program.
Generally, 25 years has been the maximum amortization period permitted for CMHC-insured mortgages. Under the program, a mortgage loan insurance premium surcharge of 0.25 per cent will apply to homeowner mortgages with 30-year extended amortizations.
A borrower buying a $190,000 home with a 25-year amortization period and five per cent interest rate would pay $1,100 monthly. By extending the amortization to 30 years, that same borrower would pay about $1,010 each month. (CREA 01/03/2006)
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