• Sharebar

Jim Flaherty’s announcement regarding the move from 30 year mortgages to 25 year mortgages, following on the earlier reduction from 35 year mortgages to 30 year mortgages, has a lot of people in flap.
It’s a good thing.
In real world terms, it means that, at current rates, the difference per $100,000 borrowed comes to about $12. a week.
Twelve bucks.
(FULL DISCLOSURE: I did the math on a $100,000 amount at 3.09% and the numbers came out to $477.88 a month for 25 years vs $425.41 for 30 years. The difference is $52.47 monthly = $629.64 per year, divided by 52 weeks = $12.11 a week.)
That’s one less mocha choco grandé latté a week.
So on a $400,000. Mortgage, that’s a smidgen over  $50. a month, hardly a crippling amount.
For buyers very close to the line, it will force them to buy something a little smaller, a little cheaper, a little less ideally located.
Welcome to the real world that all of us inhabit. I make choices every day based, not on what I might ideally like, but on what I have in my wallet.
But in the broader scheme, it sends a very solid message to the rest of the world that we are a prudent country, that we are a managed country as opposed to one where unbridled market forces are permitted free reign and the winds of greed and profit blow rampant.
In short, it shows that we are paying attention to what we are doing, promoting growth instead of hysteria, encouraging ownership rather than speculation, supporting free markets but with sufficient oversight that those free markets unfold rather than unravel.
And those are all good things.
That’s what my 10,000 hours tell me.

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>