Quote:
Originally Posted by ranchlandsselling
Lol, what like stretching out the amortization to make the payment smaller? That may seem helpful but it's just dragging out the repayment of debt and increasing the money you're paying to the bank. A banker or broker that wants you to max out what you can afford might suggest that so they can get a bigger commission/fee/bonus, but it's generally pi$$ poor adivce.
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What makes it poor advice? Mortgages should be managed as cash flow, and amortizing longer allows you to save/manage more of your money up front. You can always pay down the mortgage in lump sumps at the end of the interest term (typically 3 - 5 years), especially if the lower payment allows you to save more.
It's simply an option that should be considered by a borrower. If you are worried about rate hikes, it doesn't necessarily make your mortgage instantly unaffordable because you have the option to pay longer, and yes, pay the bank more interest.