Genworth Financial Canada Making Homeownership More Affordable For Canadians
Genworth Financial Canada Making Homeownership More Affordable For Canadians with 40-year Amortization
This morning, Genworth Financial Canada, The Homeownership Company, will now offer insurance on mortgages that are amortized over 40 years.
The extended mortgage period reduces a borrower's monthly payment, enabling more buyers to afford a home of their own and increasing the choices available to them. For example, buyers could save as much as $190 per month on a $200,000 loan at 6 per cent interest, to $1,090 from $1,280 on a 25-year mortgage.
"As home prices continue to escalate, there is the need for more flexible payment options to make the dream of homeownership a reality for more Canadians," said Peter Vukanovich, president of Genworth Financial Canada. "Genworth is committed to providing innovative and responsible products to help Canadians become homeowners sooner."
The new 40-year amortization option is designed to give homebuyers the flexibility of reducing their monthly mortgage payments for the initial years of homeownership. The homebuyer can reduce the number of years it takes to pay off their mortgage by utilizing the full range of available prepayment options.
Genworth makes low down payment loans possible by protecting mortgage lenders against the risk of borrower default. Insurance for loans under the new 40-year mortgage amortization program will include a 0.20% premium surcharge for every five years of amortization beyond the traditional 25-year mortgage period. Standard borrower requirements related to income, down payment and credit worthiness apply.
Genworth will offer the extended amortization feature on selected insurance products.
None of the major banks have made announcements as of yet with regard to whether they are going to offer this product or not.