50 Years!

Let’s Talk About the 50-Year Mortgage (again) - And Why I’m For It (still)

Short Version (aka my LinkedIn post)

Re the notion of a 50 year amortization:

No problem with a 235 year amortization on my IKEA kitchen and furniture (see image above)

No problem with financing 65% on an open interest only product - amortization infinity.

No problem with allowing a client to refinance back to the original amortization over and over and over at renewal effectively giving a 25yr old the option of an 80yr AM if they do this until age 75.

No problem with a reverse mortgage later in life.

No problem with a developer financing, and refinancing, and refinancing, a 20M$, or a 120M$ multi-family property to 95% LTV over 50yrs.... over and over and over. (and essentially to 150+% LTPP over say 75yrs)

HUGE problems with a simple change that helps younger people enter the marker today though.

Why do you care so much about what I do?
You do you!
Leave me alone.

I'm happy that I was able to enter the market when there was way less gatekeeping and way less 'protecting me from myself'.

Fascinating opinions out there on such a minor adjustment given the above.


Long Version

This topic again?
Yep.

I've mentioned it HERE - April 2020
And again HERE - April 2024

And of course on the commercial side developers & investors have had access to 50yr mortgages through CMHC for the past few years - but only if you're buying the entire building - not just a single suite.

Because a 50yr AM is fine for a landlord, a great tool for sure.
But for a resident owner?
No.

Rent a unit financed over 50yrs from someone else? - Yes! This is OK
Buy a unit finances over 50yrs for yourself? - No! This is not OK

Why?
How does this make sense?
It doesn't.
Life is not fair.

Speaking of...

Let’s start with a truth: The dream of homeownership is slipping further and further out of reach for a generation that’s working harder, earning more (on paper), but still losing ground thanks to a wicked cocktail of unchecked price increases, a confluence of qualification guideline changes: including, but not limited to, the implementation of an onerous stress test, the elimination of the 40-year amortization, the severe limitation of zero-down programs, and sure... higher interest rates.

Enter the 50-year mortgage.

Yes, that’s right. Fifty. Five-zero. And while that number seems big, maybe even irresponsible to some, I’d argue it’s one of the most practical tools we could offer to help younger Canadians finally step onto the property ladder.

Who’s going to argue against it?

Old people.
Short-sighted people.
Also old short-sighted people.

Let’s deal with the main objection:
“But they’ll be paying off a mortgage into their 80s!”

That assumes a few (false) things: that people don’t move, don’t refinance, don’t increase their payments, don’t make lump-sum payments, don’t switch to shorter amortizations at renewal, or don’t ever get a raise. This is a lot of short-sighted assumptions and opinions that ignore historical facts.

When we had a 40yr amortization pre 2008; the median number of years left at renewal 5 years later?
32 years.
Ya.
Not 35 - 32.

Those were the clients that made it to renewal mind you, in reality, few Canadians hold a mortgage on the same property for even 10 years, let alone 30 or 50. Life happens: jobs change, families expand and contract, opportunities arise, and with all of this their mortgages are regularly restructured.

We have people in their 50s opting into 30-year amortizations today.
So why are we limiting someone in their 20s from choosing the same effective timeline?

A 50-year amortization is not a life sentence.
It’s a runway.
It’s breathing room.
It’s the ability to say “yes” to owning instead of endlessly renting.
It’s a leg up onto the first rung of property ownership and equity building.

More importantly, it puts choice and flexibility into the hands of the borrower. It acknowledges the reality that high housing prices and elevated interest rates are not going away anytime soon. This gives people a way to work with that, rather than be pushed out of the game entirely.

To the critics who clutch their pearls about how much interest will be paid over time, I say this:

Monthly cash flow matters more than theoretical interest cost over 50 years.

Nobody’s saying we should hold a mortgage that long — but if we can, and it helps people start, that’s a win.

Get over it.

This isn’t a conspiracy. Banks aren’t rubbing their hands together over this, they know they rarely hold mortgages long-term anymore. The competition is real. The pace of change is real. The triggers for prepayments and refinances are real.

Count on many of the people who would actually benefit from this to rally against it.
(Though maybe not the ones with adult kids still living in the basement.)

This isn’t a gimmick. It’s a recognition of modern economic conditions.
The 50-year amortization is a tool, no not the tool, but certainly a tool.
It’s not for everyone. But isn’t having options... a good thing?

How does a 50-year mortgage hurt you?
Why are you against it — other than “just because”?
You don’t have to take one. So how does it matter at all to you?

For those it helps into the market, for the single parent (widowed or otherwise) trying to keep the kids in the same school catchment area, this is pure gold. To bridge a gap of a few years until graduation, to ride out a market correction.

It’s a lifesaver.

It’s a damn helpful option for those who’d otherwise have no shot at ownership.

So yes, I’m in favour. Strongly.

Let’s open the door, literally, to a future where more Canadians can own their own home.

And as for arguments against it... they’re weak.

IE - it's inflationary - really? Sorry... what was the price of a home on your block in 2008 when we have zero down and 40yr amortizations? Higher than today?

Exactly.

DW