Need some doom? Here‘s a story by the Edmonton Journal about how us “free spending” Canadians are pushing our real estate market to an eventual crash. 
In actuality there’s some truth to it, but the thing I’m excited about is the “no-interest mortgages” they say are “on the horizon.” No interest? Now that’s mortgage innovation! Wink.
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Last modified: April 25, 2014
I want a no-interest mortgage!!! ;-)
Actually they’d be quite easy to provide and there would be a market: Muslims (who aren’t allowed to pay or collect interest on loans).
The “trick” is you build the interest into the loan amount. Just sell someone the property for double the value, with them paying only principle. E.g. on a $100,000 property, sell it to them for $200K paid back over 25 years at 0%. It works out to about the same payments ($666.67 / month – more then 6% interest), but they never actually pay any interest.
I think you’re right that that’s a typo though :-).
Sounds like the old zero coupon strip mortgage alright.
Hmmm. I wonder how Canadians would enjoy paying double for their house up front (assuming they’re not Muslim)!
Rob, Asst. Ed.
Rob: They might not realize it, if you recent posts about Canadian ignorance about mortgage interest is correct.
Or they might get really angry, and not realize that double the price at 0% interest over 25 years isn’t THAT bad of deal (I’d happily take it once rates go above 7%).
Touché!