Quote:
Originally Posted by Winsor_Pilates
Hard to say. Did a lot of (0 down/40 yr) people come up unable to refinance, and this destroy prices?
We also had changes to qualifying this year and you now have to qualify for a 5 year regardless of what you're doing. That hasn't destroyed prices and refinancing either.
Not every mortgage restriction causes major decreases in affordability and pricing, so hard to say this would be different. In both of those other 2 changes, they seemed to have been made early enough to support healthier mortgage situations and the health of the overall mortgage market.
Not sure how much different this would be; really depends how many people are on 35 yr amortization's, and of them how many are in over their heads if they need to change to 25.
Lots of people might be able to handle the extra payments, and most people taking on 35 years have been young buyers who's incomes tend to be growing as they move forward as well.
Also, most people pay off their mortgages in 1/2 - 2/3 the actual amortization anyway which indicates a lot of Canadians do have extra money and throw it into extra payments when they can.
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Prices weren't destroyed when it moved to 5/35 because interest rates were much lower than the days of 0/40s, thus offsetting the sting. But the combination of higher interest rates and tighter standards at the same time will.