Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
This may be a fantastically stupid question, but here goes.
I've been watching a lot of home improvement/construction shows, a lot of which are based in Canada. Most of them give stats on what the buyer paid for the house and what their monthly mortgage is, and most of them just don't seem possible.
Like people purchasing a home for $700k, and their mortgage only being $2500/month. How is that even possible? If I paid that much for a home in the US, even with 20% down, the monthly is probably going to be around $4000. and it seems to be consistent with them all being really low.
Is the interest rate there almost nothing? Do you guys have 40 or 50 year mortgages? I can't figure it out?
This may be a fantastically stupid question, but here goes.
I've been watching a lot of home improvement/construction shows, a lot of which are based in Canada. Most of them give stats on what the buyer paid for the house and what their monthly mortgage is, and most of them just don't seem possible.
Like people purchasing a home for $700k, and their mortgage only being $2500/month. How is that even possible? If I paid that much for a home in the US, even with 20% down, the monthly is probably going to be around $4000. and it seems to be consistent with them all being really low.
Is the interest rate there almost nothing? Do you guys have 40 or 50 year mortgages? I can't figure it out?
Using Canadian Banks mortgage calculators I get numbers similar to yours. 700,000 up around 4k a month
No idea where the shows are getting their math.
Last edited by sunshineleith; 12-06-2011 at 06:52 AM..
Reason: Removed links
This may be a fantastically stupid question, but here goes.
I've been watching a lot of home improvement/construction shows, a lot of which are based in Canada. Most of them give stats on what the buyer paid for the house and what their monthly mortgage is, and most of them just don't seem possible.
Like people purchasing a home for $700k, and their mortgage only being $2500/month. How is that even possible? If I paid that much for a home in the US, even with 20% down, the monthly is probably going to be around $4000. and it seems to be consistent with them all being really low.
Is the interest rate there almost nothing? Do you guys have 40 or 50 year mortgages? I can't figure it out?
Google mortgage canada calculator and you'll see that a lot of banks have an online calculator.
A $700,000 house with a 25% downpayment of $175,000 leaves you with a mortgage of $525,000 - on one site I looked at, you can get a mortgage at 3.2% . . . (1-year term and 25 year amortization) and the payment is $2544 a month (although a lot of people get a mortgage where you make weekly or bi-weekly payments and you end up saving a fortune in interest that way). Drawback is you have to go mortgage shopping quite often - but there are really lots of deals, the interest rate is low and the banks compete for the business so you can score some real deals.
For legal reasons I won't say which bank, but if you google it you'll see what I mean
That's the extent of my (admittedly paltry) knowledge - there are definitely some financial wizards on here that would be able to better discuss it!
Also keep in mind that we dont have interest rates as high as the US rates I see advertised everywhere. For instance, just a couple weeks ago it was possible to get 1.95% fixed for 3 years. In Canada, we generally dont have long terms (like I see in the USA 15y or 25y fixed), where we amortize over up to 30 years but the rates are guaranteed only for a shorter period ranging from 1 to7 years typically.
Also, up until recently, people could amortize over 35 years, and at one point in time it was possible to get 40 year amortizations too.
Also keep in mind that we dont have interest rates as high as the US rates I see advertised everywhere. For instance, just a couple weeks ago it was possible to get 1.95% fixed for 3 years. In Canada, we generally dont have long terms (like I see in the USA 15y or 25y fixed), where we amortize over up to 30 years but the rates are guaranteed only for a shorter period ranging from 1 to7 years typically.
Also, up until recently, people could amortize over 35 years, and at one point in time it was possible to get 40 year amortizations too.
There are some mortgagees who offer up 7% cash back, if you need a loan for anything from a dream vacation to a mortgage.
In the short term, a P-0.5 with 3%-7% cash back might look attractive versus a P-1 with no cash back. However, one should do the math if your plan is to hold the property long-term and to live in it.
We sold our home last year, mortgage amount of about $300K, variable rate about 1.59% at the time, and our payment was just a hair under $1000 a month so the numbers add up.
Keep in mind, US mortgages can be fixed for the life of the mortgage, in Canada the rate term doesn't go longer than 5 years typically, even if the mortgages has 25 years remaining. This equates to higher rates in the US when you are giving up some immediate financial gain for the certainty of a fixed payment.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
