With interest rates up 3.5 percentage points this year, and Bank of Canada poised for more rate hikes in coming months, more homeowners are seeking longer amortization periods in an effort to avoid defaulting and make their monthly payments more affordable.
But some industry experts warn that increasing amortization periods is only a Band-Aid solution for a much deeper financial wound — one that more time won’t necessarily heal.
Max Rafael, a mortgage agent for clients throughout Ontario, believes it’s imperative for home buyers and owners to not be “short-sighted” when it comes to dealing with rates.
“Not just when purchasing and getting a new rate but also when you’re in the middle of a variable term rate, which is something that a lot of people are dealing with right now,” he said in a phone interview with CTVNews.ca on Tuesday.
“Obviously telling a client whose payment could have doubled or even tripled over the last year to just wait it out another year is very challenging,” he said. “Not everyone is in a financial position to really do that.”
As the Financial Consumer Agency of Canada explains, the longer your amortization period, the lower your payments will be. But when you take longer to pay off your mortgage, you pay more in interest.
According to CIBC’s Q4 earnings release, CIBC saw its amortizations soar following the fourth quarter, with a third of its mortgage portfolio having variable rates. The bank also reported that 26 per cent of CIBC’s residential mortgage portfolio now has a amortization approvals of 35 years or longer.
Similarly, TD reported that 25.2 per cent of its mortgage portfolio now has amortizations of 35 years.
Extending your amortization, Rafael said, is effectively saying that if you make your monthly payment over a longer period of time you can handle increasing costs.
Rafael calls amortization the “life of your mortgage.”
“If you’re on a thirty year amortization, that’s basically saying that if you make your monthly payment every month for 30 years, after you’ll be mortgage free.”
The longest amortization a borrower is allowed under federal law is 25 years if their down payment is less than 20 per cent, but borrowers can get much longer amortization periods if they put down at least 20 per cent.
“You really need to look in the mirror and say, ‘can I really afford this place?’ Forty years is a really long time to be paying off a mortgage. Where do we draw the line?” Rafael said.
Stress testing and qualifying rates, Rafael added, protects buyers and clients from signing housing contracts that they may not really be able to afford in the long-run.
This is especially the case for buyers on fixed incomes.
“If rates go up two per cent and you’re a salaried employee you have no other source of income. What are those people going to do if rates go up two per cent, which we saw happen this year? A lot of those people are struggling right now.”
Without having seen it, former Bank of Canada governor David Dodge believes that Tuesday's 2024 federal budget from Deputy Prime Minister and Finance Minister Chrystia Freeland is 'likely to be the worst budget' in decades.
Following the Iranian missile and drone strikes against Israel over the weekend, Canada should take the threat of Iran and potential escalation of the conflict seriously, one global affairs analyst says.
A controversial former school trustee from B.C.'s Fraser Valley who described a political rival as a "strip-tease artist" during an election campaign has been ordered to pay her $45,000 for defamation.
Michael Gordon Jackson, the man on trial after being charged with contravention of a custody order for allegedly abducting his daughter in late 2021 to prevent her from getting a COVID-19 vaccine, called himself to the stand Monday.
After four years at the University of Connecticut, Edwards was selected sixth overall by the Washington Mystics in the WNBA draft Monday night.
NASA confirmed Monday that a mystery object that crashed through the roof of a Florida home last month was a chunk of space junk from equipment discarded at the International Space Station.
Horrified worshippers watched online and in person as a bishop was stabbed at the altar during a church service in Sydney on Sunday evening.
The body of a 14-year-old boy has been pulled from Lake Ontario after police say he drowned while swimming near Ashbridges Bay Park on Sunday night.
A movie weapons supervisor was sentenced to 18 months in prison in the fatal shooting of a cinematographer by Alec Baldwin on the set of 'Rust.'
The family of a Victoria, B.C., woman who was seriously injured in an accident in Thailand is pleading for help as medical bills pile up.
Last summer, Jessica Michalofsky ran from Nelson to Victoria, raising awareness about the toxic drug crisis that claimed her son Aubrey’s life. Nearly a year later, she's disappointed by the lack of movement on the crisis, as more families lose loved ones.
A Vancouver real estate services firm is pushing back against the widely held view that not enough homes are being built in Metro Vancouver.
Hundreds of cyclists came together Monday evening to remember a well-known and long-time member of Toronto’s cycling community.
An agreement between the provincial and federal governments will see Premier Doug Ford’s flagship Highway 413 move forward with a joint working group dedicated to minimizing environmental impacts.
The body of a 14-year-old boy has been pulled from Lake Ontario after police say he drowned while swimming near Ashbridges Bay Park on Sunday night.
Alberta legislation pitched to protect provincial priorities could slow down grant funding and allow federal money to be spent elsewhere, say officials representing rural municipalities and faculty members at post-secondary institutions.
A young Okotoks, Alta., family is preparing for a long year ahead, as the first of their two children begins a stem cell transplant they hope will prolong her life.
The cradle is an anonymous drop-off site where an infant can be left in a heated, secured bed, signalling a silent alarm which informs staff.
Ontario Provincial Police are investigating after human remains were found in the Ottawa River in Clarence-Rockland on Monday.
After four years at the University of Connecticut, Edwards was selected sixth overall by the Washington Mystics in the WNBA draft Monday night.
Ottawa police say no suspects are being sought in the death of a teenager in an Ottawa park last Friday, but are offering few details on the circumstances of the incident.
Linda Simard says her husband frantically told her to call 911 as he watched two volunteer firefighters get swept away in rushing floodwaters in Quebec's Charlevoix region last year.
Lucas Raymond scored 4:35 into overtime after he scored a game-tying goal with 1:17 left in regulation, lifting the Detroit Red Wings to a 5-4 comeback win over the Montreal Canadiens on Monday night that keeps their playoff hopes alive.
A man is fighting for his life after falling about 30 feet in an air duct at the Olympic Stadium on Monday, authorities say.
Two tickets were issued after an unleashed dog was seen in front of a home where a boy died in a dog attack earlier this month.
In an exclusive interview with CTV News Edmonton on Monday, the premier said a study out of the United Kingdom, the Cass Review, echoes some of her concerns in regards to a lack of scientific rigor when it comes to puberty blockers.
The Alberta government is offering a 7.5-per-cent wage increase in the midst of collective bargaining, with government workers calling for a 26-per-cent bump.
Police are looking for a youth who allegedly stabbed another youth in Halifax on Monday morning.
A low pressure system brought a series of weather fronts across the Maritimes on Friday and into the start of the weekend.
Halifax Regional Police has arrested and charged 21 people at a pro-Palestinian demonstration in downtown Halifax Monday morning.
A mass exodus of elected officials from a rural Manitoba municipality has put the community in limbo and may force the province to dissolve what's left of the crumbling council.
An approaching low-pressure system that could bring 50 millimetres of mixed precipitation has triggered a flood warning for parts of Manitoba.
If you’ve ever felt the allure of Hollywood and wanted to be in a big-budget movie your time to shine is now.
Moose Jaw's hyperbaric chamber has now partially resumed services after being discontinued in 2021 due pandemic related staffing shortages. However, only one patient is currently being treated leading to criticism over a perceived lack of service.
Michael Gordon Jackson, the man on trial after being charged with contravention of a custody order for allegedly abducting his daughter in late 2021 to prevent her from getting a COVID-19 vaccine, called himself to the stand Monday.
Regina's Jon Ryan is set to sign a one-day contract with the Seattle Seahawks tomorrow officially bringing to an end his pro-football career.
Cambridge resident Samantha Falkiner explains why something felt "off" about the men who approached her and her neighbours on Friday.
Police are searching a residence just east of downtown Guelph after a man went to hospital with injuries from a homemade explosive device.
Wellington County OPP is currently investigating a double fatal collision near Drayton.
Friends are raising money for the grieving family of a 16-year-old Saskatoon boy who was killed in a high-speed crash that injured two other teens on Sunday morning.
Dr. Ana-Maria Bosonea is the only allergist in Saskatoon seeing children under 12, and now she’s moving to Alberta.
The city says there may be some odour emanating from the landfill in the coming weeks as crews dig new gas wells and piping to collect more methane from decomposing waste.
A northern Ontario family is devastated after a jury found a Moose Factory man not guilty of a 2021 murder.
A digital forensics analyst testified Monday in Sudbury at the trial of Liam Stinson, who is charged with three counts of first-degree murder in connection to an April 2021 firebombing.
The Thunder Bay police chief is acknowledging some residents' eroding trust in the service as his predecessor and other high-ranking members of the force face criminal charges.
A motion going to city council Tuesday could be the first step in approving a pilot project that would approve bus passes for students in grade nine at Clarke Road Secondary school.
Multiple warnings have been issued about the dangers of coyotes and potential wild dogs following a weekend attack that left one person seriously injured.
When Westdell Development acquired White Oaks Mall last year, President Iyman Meddoui said they always had the vision of adding additional commercial and residential components.
It's been more than two years since Jim Lynne died in a crash along Mosley Street in Wasaga Beach.
A street sign in Barrie, renamed to honour 11-year-old Chase McEachern's legacy after he died in 2006, has gone missing again from an alleyway at the heart of the city's waterfront.
The residents of Kashechewan First Nation are in a race against time, preparing for a mass evacuation as the relentless threat of flooding from the Albany River looms closer.
Windsor police are looking for a woman after a parcel was taken from a home in the 400 block of Chilver Road.
The first Canadian tornado of 2024 hit Essex County in March, says a report from the Northern Tornadoes Project.
A new ranking by food delivery platform Uber Eats puts Windsor among the top cities in the province for ordering cannabis.
The family of a Victoria, B.C., woman who was seriously injured in an accident in Thailand is pleading for help as medical bills pile up.
A Vancouver woman whose company duped investors by promising big returns on real-estate deals that would house the homeless has been ordered to pay nearly $626,000 after the British Columbia Securities Commission deemed the operation a Ponzi scheme.
The HMCS Max Bernays made its way into its new home at CFB Esquimalt on Monday after a long journey from Halifax.
British Columbia is planning to add 240 new units to its complex-care housing program, providing homes for people with mental-health and addictions challenges that overlap with other serious conditions.
More than 80 residents from a low-income apartment building in Kelowna, B.C., have learned they won't be able to return to their homes for at least another two weeks.
Mounties are investigating a reported "road rage" incident in Kelowna, B.C., that left two men injured last week.
Lethbridge West MLA Shannon Phillips is calling on the province to reinstate funding for the Lethbridge Elder Abuse Response Network.
If you’re planning to head to the coulees this weekend to enjoy the nice weather, don’t forget to look down.
With the weather starting to feel like spring is really here, more kids will likely be outside enjoying the sunshine and warm temperatures, which organizers of the Slow Your Roll campaign say is a perfect time to re-launch the campaign.
The City of Sault Ste. Marie is expecting a busy summer at the Downtown Plaza. City officials say the plaza is coming off a successful first winter season, which saw large crowds gathering at the outdoor rink.
The Soo Greyhounds are the talk of the town, as their second-round matchup in the OHL playoffs touches down in the Sault.
Thunder Bay Police Service held a news conference Monday afternoon to discuss the misconduct investigation that led to criminal charges being laid against the city's former police chief.
A pricing agreement has been reached between crab fishers and seafood processors that will allow for Newfoundland and Labrador's annual crab fishery to get started.
Longliners across Newfoundland and Labrador are tied up once again, as a new protest by the province's fish harvesters threatens to derail the crab fishery for a second straight year.
A unique photo exhibit is putting cameras into the hands of survivors of domestic and sexual violence in Newfoundland and Labrador.
While many people choose to keep their medical appointments private, four longtime friends decided to undergo vasectomies as a group in B.C.'s Lower Mainland.
A popular highway in Alberta's Banff National Park now has a 'no stopping zone' to help protect two bears.
B.C. resident Robert Conrad spent thousands of hours on Crown land developing an unusual bond with deer.
A Sudbury woman said her husband was bringing the recycling out to the curb Wednesday night when he had to make a 'mad dash' inside after seeing a bear.
A school teacher who took part in the Quebec version of the Survivor reality TV show took time off work to be a contestant is now out of a job.
A young actor from Prince Edward Island is getting the chance to fulfill a childhood dream, playing the precocious and iconic Anne Shirley on stage.
Nicholas Zhang, 17, will be competing at the Paris Olympics in July. He is the youngest Canadian male fencer to ever compete in the category.
For many, Monday's total solar eclipse will become a distant memory or collection of photos to scroll through in the years to come. But for Alannah Duarte and her family, they'll be reminded of the rare celestial event every year they celebrate their youngest son's birthday, as he was born on the day of the momentous occasion.
A Montreal couple is having a hard time driving without stress and is unhappy with the city's maintenance after a chunk of highway crashed into their windshield while driving on Thursday night.
Deputy Prime Minister and Finance Minister Chrystia Freeland will be presenting the 2024 federal budget on Tuesday, revealing how the federal Liberal government intends to balance the nearly $40 billion in pre-announced new spending with her vow to remain fiscally prudent.
Foreign Affairs Minister Mélanie Joly says she's urging Israel to de-escalate rising conflicts in the Middle East and not bomb Iran in retaliation for this past weekend's thwarted airstrikes.
Without having seen it, former Bank of Canada governor David Dodge believes that Tuesday's 2024 federal budget from Deputy Prime Minister and Finance Minister Chrystia Freeland is 'likely to be the worst budget' in decades.
It’s common knowledge that exercise is good for your mental health and your heart health — and now a new study suggests that all three are working together.
The cybersecurity firm BrandShield has taken down more than 250 websites selling fake versions of popular weight-loss and diabetes drugs in the GLP-1 class, the company’s CEO Yoav Keren told Reuters.
Functional beverages -- or drinks promoted as offering mental or physical benefits beyond hydration -- are growing in popularity around the world. Hundreds of companies have jumped into the market, hoping to get some buzz with trendy and sometimes unfamiliar ingredients.
NASA confirmed Monday that a mystery object that crashed through the roof of a Florida home last month was a chunk of space junk from equipment discarded at the International Space Station.
Using genes from coffee plants around the world, researchers built a family tree for the world's most popular type of coffee, known to scientists as Coffea arabica and to coffee lovers simply as 'arabica.'
NASA is seeking innovative methods that could help retrieve samples collected by the Perseverance rover on Mars in the future.
Dyson Knight may look like an average college student, but since 2004, he’s actually been a member of the internationally acclaimed Baha Men.
Canadian singer Grimes apologized to fans on Saturday after her Coachella set earlier that evening was beset by technical issues that caused her to scream into the microphone in frustration.
A movie weapons supervisor was sentenced to 18 months in prison in the fatal shooting of a cinematographer by Alec Baldwin on the set of 'Rust.'
A Vancouver woman whose company duped investors by promising big returns on real-estate deals that would house the homeless has been ordered to pay nearly $626,000 after the British Columbia Securities Commission deemed the operation a Ponzi scheme.
The U.S. Department of Justice is preparing to file an antitrust lawsuit against Live Nation as soon as next month, the Wall Street Journal reported on Monday, citing people familiar with the matter.
Apple's smartphone sales tumbled 10 per cent last quarter, according to market research firm IDC, as sales in China fell sharply.
A high score on a Foo Fighters pinball machine has Edmonton player Dave Formenti on a high.
Celebrity food critic Keith Lee said he was blown away by Toronto, handing a rich ranking to its culinary creators, as the first international stop of his latest food tour.
Even as the cost of living goes up, there are still ways to save some cash when out shopping or using credit cards.
After four years at the University of Connecticut, Edwards was selected sixth overall by the Washington Mystics in the WNBA draft Monday night.
The Indiana Fever selected sharpshooter Caitlin Clark with the first pick of the WNBA Draft on Monday.
The NBA broke all-time regular-season records for total attendance, average attendance and sellouts for the second straight year in 2023-24.
Tesla will lay off more than 10 per cent of its global workforce, an internal memo seen by Reuters on Monday shows, as it grapples with falling sales amid an intensifying price war for electric vehicles.
Looking for a break on car insurance premiums is often top of mind for drivers. And finding ways to reduce that figure is especially important now, when rampant thefts have led to higher insurance costs.
A police operation into stolen vehicles showed how Canada’s second-largest port in Montreal has become a key transport hub for stolen vehicle exports. Police say that's because of the port's strategic location and large container volume.
The Shopping Trends team is independent of the journalists at CTV News. We may earn a commission when you use our links to shop. Read about us.
