Amid higher rates for longer, Canada’s mortgage structure is exacerbating payment shocks: Desjardins

As higher for longer interest rates weigh on Canadians in the housing market Jimmy Jean, Vice-President and Chief Economist at Desjardins says its time to take a look at 10-year mortgage terms. He says longer renewal terms can help alleviate payment shocks for Canadians, but it has to start with an overhaul of our prepayments legislation and improvements to our mortgage securitization ecosystem.

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[sherdonforbes]

This guy just wants to prop up home prices.

[sylvainho]

I think we are fucked hard in Canada. In the Usa, during Covid they were telling people to sign 2% for 30 years mortgage. Can you imagine! Over there you can get a fixed rate 30 years mortgage and sign it when the interests rates are super low then you set for life! He you sign like maximum 5 years and the 10 years are so damn horrible rates nobody would sign them....

[pouetpouet]

Nothing prevents people from taking a 10 years term. Today Desjardins offers 10y at 5.84%. Who will be willing to lock that rate for 10 years? It is wishful thinking that longer terms will fix the current issue.

[tylerrobdavis]

Gross. This type of thinking is why we are where we are. US has 30 year mortgages, but houses are half the price. Houses prices are a burden to our economy and society as a whole

[zomgoose]

How about the government stop tampering with markets by financial repression/QE

[glennkings]

The banks are handing out GIC's at 5.5% for a year. They wouldn't be offering that if they thought rates were going to come down anytime soon. This interest rate is the new normal, or higher. You would also have to keep the house you bought for ten years or will be paying extreme penalties if you sell before renewal.

[MrPatrick]

What happened to rate cut promises? This lured in more buyers to prop up the failing real estate market.

[zinithin-]

Canada is backwards compared to the USA when it comes to mortgage fixed rates. That being said, it’s the governments fault for why homes are so expensive. Poor policy choices and unrestrictive government spending causing a doubling of the money supply in two years. Allowing 5% downpayment and CHMC insurance is a mistake, it causes inflationary pressure by increasing demand.

[zinithin-]

People knew the risks of buying a bunch of sticks (a home) for a million dollars at record low interest rates. They knew rates could rise and gambled, now time to pay the piper.

[shiftyrazzy]

I love how this is even a discussion. Banks will bend you over no matter what we try.

[SS-ndew]

Quality mortgages? Lol. I recommend watching mortgage fraud documentary recently released by cbc marketplace.

[MAGC-ezde]

try removing Bank of Canada as the people who government Finance. As we all know, Banking (CRA : tax police) are the people who Governs Canada. If Canada wants to not be FASCIST anymore, maybe GOvernment of Canada should get some Businessmen as PM. We got a Drama teacher as PM and a FInance minister who's a REPORTER>>>> WTH????

[hughgodau]

nobody can predict the future. this lesson we are about to learn may teach us to pay closer attention to the quality of people we elect to spend our tax money

[treaty]

If interest rates go prices go down but not for 1st home owners or if your living in your home...if so they will help you. If you got several homes ....trying topay them bank will help you.

[InterestbearingCBDC]

1:05 Absolutely yes we do need 30 year fixed..

[Michael-pgrv]

5 year terms are way too short to plan around. In the United States they have 30 year terms which is way to long because then the banks take on too much risk. I think 7 years would be optimal.

[ThomasMullaly-dolz]

Have you checked out the costs of a ten year mortgage?

[Barr]

As soon as B of C cuts, inflation in Canada spikes, and the Canadian dollar tanks.

[tidy]

There should be NO penalties when people collapse their mortgages early! These fees are out of control.

[woxnerw]

This guy and Ottawa is confusing the term of "AFFORDABLE HOUSING"