Some banks mostly offer fixed-payment variable mortgages which allows homeowners to keep monthly payments the same, but leaves them vulnerable to paying little off the principal, experts say.
It’s important to note, said Sialtsis, that major banks aren’t handing out 90-year mortgages when people first buy a home; the changing amortization period is only happening on existing variable-rate fixed-payment mortgages.
I think the original commentor is saying there should be a limit to variable rate amortization extensions. If the owner can’t afford the current rate, then the fall into arrears.
Well the fixed-payment mortgages aren’t exactly fixed. They will still get adjusted when the payment covers very little to no principal. For example mine got adjusted to get the amortization back in check when that happened. Maybe that’s a choice the banks make, maybe CHMC dictates what’s allowable or required there. If banks have to adjust the payments like they did for me, eventually the foreclosures will show up. Unless most of them are just under their trigger rates and the prime doesn’t push them over the edge for a while. 🤔
I don’t disagree in the sentiment that payments should adjust and the non-viable ones should get foreclosed on, in general.
FTA
I think the original commentor is saying there should be a limit to variable rate amortization extensions. If the owner can’t afford the current rate, then the fall into arrears.
Well the fixed-payment mortgages aren’t exactly fixed. They will still get adjusted when the payment covers very little to no principal. For example mine got adjusted to get the amortization back in check when that happened. Maybe that’s a choice the banks make, maybe CHMC dictates what’s allowable or required there. If banks have to adjust the payments like they did for me, eventually the foreclosures will show up. Unless most of them are just under their trigger rates and the prime doesn’t push them over the edge for a while. 🤔
I don’t disagree in the sentiment that payments should adjust and the non-viable ones should get foreclosed on, in general.