Interest-Only Makes A Comeback

Canadian Mortgage Trends ~ June 22nd, 2018

Innovative mortgage products. Remember those?

With Ottawa’s onslaught of rule tightening, it’s been a while since we’ve seen a new product that was substantially unique. This is one of them.

Merix Financial, the broker channel’s seventh-largest lender by market share, is launching the Interest-Only Flex mortgage on Monday.

The IO Flex has one key purpose: to cut a borrower’s monthly carrying costs.

While the rates are higher than a conventional amortizing mortgage (as you’d expect given the higher risk), the payments are materially lower.

Take a $300,000 30-year-amortized mortgage, for example. A traditional adjustable-rate mortgage at prime – 0.75% has a payment of $1,214.

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