FCAC launches updates to mortgage tool kit
OTTAWA, September 6, 2006 The Financial Consumer Agency of
Canada (FCAC) today released the latest updates to its suite of on-line mortgage
tools. FCAC's mortgage qualifier calculator and mortgage calculator are designed
to help consumers determine if they qualify for a mortgage and help them
calculate their optimum schedule of payments.
These tools, together with the Agency's on-line mortgage quiz and its
publication The ABC's of Mortgages, enable consumers to better
understand their rights and responsibilities as well as the terms and conditions
associated with various mortgage products available on the market.
Consumers who are shopping for a house can use FCAC's calculators to find out
whether or not they may qualify for a mortgage, given their current income and
debts.
"FCAC's mortgage calculator can show consumers how many years and how much
money they can save by making pre-payments. With new products now being
introduced on the market such as mortgages with amortization periods of up to 35
or 40 years, consumers should do the math and know their options before signing
a mortgage agreement," said FCAC Commissioner Bill Knight. "These kinds of
mortgages can mean a smaller monthly payment, but consumers should be aware of
the potential consequences, such as the amount of interest they will pay over
the years."
Thirty-, thirty-five- and forty-year mortgages, which are now available in
Canada, can offer an attractive lower monthly payment. But, with these
mortgages, the very long amortization period means that consumers will end up
paying a much larger amount of interest.
"Even knowing the extra costs, consumers may well have good reasons to opt
for this type of mortgage product," said Knight. "For some consumers, a longer
amortization period may be the only way to gain access to an expensive housing
market. However, Canadians who are thinking about a long-term mortgage should
consider opting for accelerated bi-weekly payments. Doing so, they can save tens
or even hundreds of thousands of dollars in interest over the years," Knight
added.
For more information on mortgages, consumers can also consult the Agency's
Frequently Asked Questions (FAQ) database, which contains answers to a number of
mortgage-related questions - from penalty calculations to insurance products to
interest rates. To view FCAC's FAQ database, visit the Agency's Web site at:
www.fcac.gc.ca and go to the "For Consumers" section. The
Agency also publishes The ABC's of Mortgages, which
consumers can download from its Web site or order, free of charge, by calling
FCAC's Consumer Contact Centre, toll-free, at: 1-866-461-3222.
FCAC ensures compliance with the consumer protection laws, codes of conduct
and public commitments that apply to banks and federally incorporated trust,
loan and insurance companies. FCAC also provides consumers with accurate and
objective information about financial products and services, and informs
Canadians of their rights and responsibilities when dealing with federally
regulated financial institutions.
- 30 -
Media contacts:
Martine Bélanger
Communications Officer
613-941-8982
belanger.martine@fcac.gc.ca
John Kane
Manager, External Communications
613-941-8988
kane.john@fcac.gc.ca
