Mortgages
Canadian Banks and Mortgages
Unlike the rest of the globe, which seems to be trapped in an eternal cycle of recession, recovery, and rate increases, Canadian banks and brokers seem to have an approach that limits the impact of macro-economic money battles on their customers. This is down to 3 major factors – interprovincial co-operation, long-term bank mortgage offers and unique political stability. Let’s take a look at each of these defining factors separately so that we can better understand the enigma that is Canadian mortgages.
Interprovincial Cooperation
The biggest difference between the Canadian and American mortgage and overall banking structures lies in the fact that the provinces and states operate completely differently. Because of the wars that gradually shaped the United States of America, there is a huge number of governing organizations that banks have to report to. There are often district controlling bodies, which report to state authorities, who are under the rule of the Federal Reserve and banking system. This means that your mortgage has to appease three different bodies, and the rules vary from state to state according to political policy. This means that there are a lot of external pressures on your finances and mortgage, and many Americans will attest to the fact that it’s quite a rollercoaster ride.
Canadians are blessed in that mortgage brokers and larger banks have managed to cultivate a sense of cooperation. This means that there are country-wide indicators which will determine interest rates, REPO rates and so on. Canadian banks and brokers work together to help their citizens minimize the stress and payments of mortgages, which is a huge help that is reflected in their low repayment rates.
Long-term mortgages
Canada has managed to stay under the global financial radar, and avoid the influences of American decisions in particular. As a result, instead of mirroring the American short-fix solution style, which has a direct and traumatic effect on mortgage payments, Canadian mortgage brokers offer long-term solutions which remain fixed and do not change when the political situation does. This means that citizens can plan more thoroughly in advance, and have a much greater chance of successful repayment. This maintains the mortgage system, which adds stability.
Political stability
It is important to remember that all financial facets of our lives are affected by political decisions that are beyond our control. Canada is one of the most stable countries in the world, and this is the final factor that allows mortgage brokers to give their patrons support.