Shawn Stillman quoted in The Financial Post: “Americans may soon get the option of 50-year mortgages. Here’s why Canadians shouldn’t be envious”

https://financialpost.com/fp-finance/canadians-should-not-envy-50-year-mortgages-trump-pitching

“I’ve been in the business for 16 years and done three 10-year mortgages,” said Shawn Stillman, a CPA and mortgage broker who co-founded the Mortgage Outlet.

He pointed out most banks in Canada sell five-year bonds, and they sell bonds to match mortgage rates. “I don’t know if we have the same appetite in Canada for 10-year debt as they do for 30-year debt in the States,” said Stillman.

On the consumer side, there is also a significant risk. “You break it after two years because maybe you get divorced and your interest-differential penalty is the eight-year remaining term,” said Stillman.

The IRD (interest rate differential) is intended to compensate lenders for the interest they lose when a mortgage is paid off early. “That penalty would take the knees out from someone,” said Stillman.