Changes to the Bank Act open the doors to mortgages

[Dion]

Thanks to changes to Canada's Bank Act, we can buy with a 20% down payment and no longer pay insurance premiums for a high-ratio mortgage.

But, eyebrows were raised when CMHC followed in the footsteps of private lender Genworth Capital, the world's largest mortgage insurer, to introduce 40-year mortgages.

Fear was the buy-now, pay-later trend could lead buyers to take on too much debt. And that could lead to a mess similar to the housing collapse in the U.S., where a growing sub-prime market that qualifies buyers with bad credit, exploded into $570 billion US industry. The bubble burst, 44 lenders went belly up and people lost their homes.

http://calsun.canoe.ca/Business/2007...01136-sun.html

[4X4]

Not a very significant change from 25% being a conventional mortgage. If it went to 15% or 10, then I'd agree that there's a reason to raise an eyebrow.

And 40 year ams have been around since forever. They're just not common during times of boom.