40 year mortgage canada

the historical average in the United Kingdom has been a house price - earnings ratio of 3.5 (average 3.5-times average earnings house price). But this house in 2006 from an average price-earning ratio has increased to nearly 6.0 (Source: http:// www.nationwide.co.uk / HPI / historical.htm)

The effect of this is that for the first time buyer, if they are able to get a mortgage they will probably be borrowing up to 5 or 6 times there income. This means that the mortgage payments is a very high% of their income. The new homeowner is particularly sensitive to changes in interest rate. For example, the recent rise in interest rates (November 8) homeowner meant to say an increase in their mortgage payments. It is likely that interest rates should rise further in the United Kingdom because of the persistently high inflation and high domestic borrowing. However, this could lead many homeowners, especially first time buyers, which is not in danger, with mortgage payments. And therefore are at risk at home repossessed. Some people say, 50 years old mortgages are bad, because it means that you pay mortgage payments if you are retired. However, a 50-year mortgage is a lot better than the alternative which is not in a position to buy or keep up with mortgage payments.

1. Firstly, it is important to remember that mortgage easier to pay back, the longer you have a mortgage. This is because apart from fluctuations in interest rates, interest payments are. Therefore, as long as real wages rise. Mortgage payments is a small% of income in the future. For example, a monthly mortgage payment of £ 700 sounds a lot, but in 40 years the real value of £ 700 is much lower adoption of a moderate inflation and real wages.

2. A 50 years mortgage means your monthly repayments will be the smaller mortgage payments easier to meet.

3. The cost of renting a house but will rise with inflation, or possibly more than inflation. This means that if you continue to rent instead of a mortgage. In your retirement, the actual cost of renting is much higher than the cost of the mortgage.

4. There is an old saying that the renting is dead money. That is quite true with a mortgage you are at least partly contribute to the acquisition of wealth. Real Estate is very valuable for the future, if you back a mortgage or a loan against the value of your home.

5. It is true that the longer you borrow the more interest you pay, but if your financial circumstances change in 20 years, you can use your mortgage to another deal with you to pay a portion of the equity.

Basically Finally, despite rising real estate prices and property prices are rising much faster than the growth of real wages, it is still desirable to buy a house and to the director, if possible. 50 years mortgage, that this is only possible for those struggling to monthly mortgage repayments for standard mortgages.

More on this topic: 50 years of mortgage

Richard is a business teacher in Oxford and is a member of the Sri Chinmoy Center. Edits Richard writes on a variety of topics, including economic and Mortgages: http://www.mortgageguideuk.co.uk/