Originally Posted by E36is
^^ isnt that how the american banks got into trouble?
Short answer, no.
You are forgetting a very important detail, the interest rate and if interest was all they were paying period to start.
While lenders did approve those who were not qualified by normal industry standards, they also had them in situations where their payments to start were either interestor had a very low introductary rate. Ultimately they are unable to afford the payments when the rate increases in the 1-2+ yrs that follow... Lending practices in the US became very suspect, a lot of greed but also a lot of stupid people who claim to never have read the fine print.
That is NOT the case here in Canada, we have MUCH stricter standards. In fact and do not quote me exactly but for the first time a few years ago the Canadian gov. allowed a 40 year ammortization, within one year almost HALF of all new applicants chose the 40yr amm. The government quickly stepped in and halted that, cutting it back to 35.
The mentality of Canadians has always been to pay off the mortgage, quite a different mind set in the United States.
Just a fun fact... There is a book that shows the inflation in things such as gas/milk/cars etc from 1950-2005, fifty years of something .. any way the point, while most items have seen costs in 50 yrs increase 10 fold the family home has increased 100 fold on average! Owning a home and paying it off has become MUCH more difficult. Many factors here, from greed to government regulations no specific culprit.