Co-Mortgages A Creative Solution to Canada Housing Affordability Challenge
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The cost of buying a house in Canada remains a significant challenge for many, with the average selling price of a home reaching $655,507 in September, marking a 2.5% increase from the previous year. While the benchmark interest rate is at five percent, the Bank of Canada hasn't ruled out future rate increases, contributing to concerns about housing affordability. In response to this, an Ontario brokerage company is promoting co-mortgages as an alternative solution. The idea is for multiple individuals, even strangers, to pool their resources and buy a home together, creating a joint investment that can make homeownership more attainable.
The concept of co-mortgages is not entirely new, particularly in larger Canadian cities like Vancouver and Toronto, but it is gaining traction as a viable option. However, some experts caution that such arrangements can be fraught with issues, especially when strangers come together to purchase a property. Mortgage specialists emphasize the importance of clarity in the arrangement, defining whether it's a long-term or short-term investment, and addressing potential future scenarios like a partner wanting to move out. Co-ownership agreements are typically established as joint tenants, where each person has an interest in the investment, and this can become a complex issue in the event of changes in the co-owners' situations.
Read the full article on: CBC
