Canadian and US mortgages: not on the same playing field
Many people would assume that when it comes to mortgages, both Canada and the US are set up the same but this is not the case. In the spirit of Canada Day here are five reasons why it’s so great to have a mortgage in Canada:
- In Canada lenders offer monthly, semi-monthly, weekly, and bi-weekly payment options while in the US borrowers are generally required to pay on the first of every month.
- With Canadian lenders, brokers and specialists can offer pre-approvals and rate holds at no cost while in the US a fee is charged.
- Canadian mortgages can be ported but in the US this is not typically allowed.
- When it comes to insurance, in Canada the amount is typically added to the mortgage amount and paid up front while in the US borrowers pay monthly and can cancel it when the LTV (loan to value) falls below 80%
- Canadian pay much less in origination costs for mortgages. In the US there are many “points” and fees tacked on so Americans can generally pay $3,000 - $5,000 vs. the average $1,800 in Canada.
One other great statistic that is interesting to learn is that although the US offers homeowners a mortgage interest tax deduction that is not offered in Canada, in both Canada and the US homeownership is about 68%
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The Mortgage Centre