50 Year Mortgages

50 Year Mortgages

Kakllyn mentioned that she heard there were 50 year mortgages available in Canada. This is not correct. Earlier this year 40 year mortgages were introduced. The idea is to make housing more affordable by stretching out the payments. Most people take a 40 year mortgage for the first few years and then shorten the amortization by making bi-weekly payments or increasing their monthly payments.
On a 35 year mortgage, if you make bi-weekly payments ( 26 payments per year) you are in effect adding a 13th month to the year. You can shorten the mortgage to 28 1/2 years with this strategy.