Comments on: A Mortgage is Forever

By: Mike

Mike — Thu, 30 Jul 2009 17:24:14 +0000

In Canada, when you take a 25 or 35 years mortgage you also take a 5 years contract. Usually, you can pay 100% more then your montly payments and up to 15% of the capital. So if you have a 200k mortgage with 1000$ monthly payment you can pay up to 54k per year, which means you could hypotetically pay in less than 4 years (this is not realistic but it is possible). Having that in mind you will never reach 25 years or 35 years unless you pay the minimum. If you pay the minimum you either are getting screwed or have a mortgage you can’t afford.

By: lucia

lucia — Sun, 19 Apr 2009 16:10:02 +0000

A 99 year mortgage means buying a house is within the grasp of more people , the property itself is an investment for the future and can be used as capital.

By: Eric

Eric — Thu, 20 Mar 2008 20:41:08 +0000

And what about paying out more than your monthly mortgage payment for rent forever? Some people may never pay off their mortgage, so what? Some people pay rent forever. If they can obtain a great house that offers better quality of living, build a little equity and pay less per month than what rent would be, why not get a 50 or even a 99 year mortgage? I would sooner live in a house that may appreciate than pay as much or more per month for rent that offers no quality living and absolutely no chance of getting anything off the monthly payment.

By: Ralph Morgan

Ralph Morgan — Sun, 24 Sep 2006 00:22:21 +0000

I imagine long term (>25 year) mortgages would be taken out as a form of “low start” loan. Most people would intend to pay them out well before the term expires – eg. when retire, get an inheritance, sell their business etc. etc

I’d be careful when comparing the total interest payments for a 15, 20 and 35 year loan, as inflation makes the PV of these amounts very different – eg. compare the PV of $344,000 in 35 years time if inflation averages, say, 3% [PV $126,000] with that of $230,000 in 25 years [PV $113,000] shows the difference isn’t as huge as it seems.

Also, when you consider what the value of the property is likely to be in 35 years the interest paid is likely to be much less than the total interest paid – this is why people investing in real estate choose to borrow as much as possible, even though it increases the interest paid to be more than the rent income received (here in OZ the overall loss is tax deductible against other income, eg. wages).

Regards
http://www.enoughwealth.blogspot.com

By: Baboune

Baboune — Fri, 22 Sep 2006 08:21:01 +0000

Hi,

Recently moved to Sweden. Here 200 years+ mortgages are standard as no one can afford to buy any housing without such incentives. On the plus side, interest paid on mortgages are tax deductible.

And who is using that? Well I am surely considering it…

By: AJC

AJC — Fri, 22 Sep 2006 01:48:13 +0000

50 year mortgages are standard in the US, or even 99 year mortgages in England.

SO 35 years is a new stretch, it basically helps anyone and there dog acquire a home here in Calgary.

By: MikeB

MikeB — Thu, 21 Sep 2006 20:26:39 +0000

CC, I got this link via email today. Thought you and others might be interested.

http://www.clientacc.com/email/JW/0625/EN_email_online.html

By: Canadian Capitalist

Canadian Capitalist — Thu, 21 Sep 2006 14:00:59 +0000

50 year mortgage? Wow. And I thought 35 years was bad!

By: 0xcc

0xcc — Thu, 21 Sep 2006 12:02:43 +0000

I saw a 50 year mortgage promoted in an ad on TV a couple of weeks ago. 50 years! What would some one be thinking to take that. Even if you bought a house at 25 years old you wouldn’t be mortgage free until you were 75. Of course interest-only mortgages are even worse than that but if you use an interest only mortgage more as a savings account (a home equity line of credit for example) then I think they can make sense…