The danger in stretching a 25-year mortgage to the 40 year CMHC mortgage is that it will hurt home buyers who in the first place cannot afford to buy their own homes. The program is a two-edged sword. Yes, the lower monthly mortgage payment enable home owners in buying their homes, but it will also likely become a huge financial burden to the home owners. Click here to see how much more a home owner is indebted.
The cost of home ownership is so huge that a home owner is indebted to almost a lifetime of servitude to paying off his or her home mortgage. When the other costs of home ownership are added to the mortgage payment, a home owner who barely qulify for a 40 years loan will have little left for lifestyle expenses.
So, the question is "Is it worth it?" Are home owners sold into a dream of homeownership, that home prices always go up? Maybe, they should just step back and re-assess the media hype on the merits of home ownership. Affordable loan programs like 5% down payment and 40 years easy mortgage are good for CMHC and the Banks, but not for consumers.
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