RE/MAX Real Estate Centre Inc

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told Members of Parliament: "We have concerns with the increased prevalence of very long amortization and higher value mortgage products. They add to momentum in the housing market and if everyone has a 40-year amortization mortgage, then you just have higher housing prices." Nonetheless, Carney feels Canada is not following in America's footsteps. He said housing problems are "not possible in our system, to the U.S. magnitude." - -look at 40-year amortizations he says "If you can't afford a home, rent and save money for a down payment." He suggests couples save $10,000 a year using tax free savings account. Then, "with well-chosen investments, the tax-free growth should [result in] a 25% down payment on a home in a few years." Sounds good on paper. But three years of saving $10,000, and a 10% return, yields about $35,000. If that's used as a 25% downpayment it implies a house price of $139,000. With Canada's average house at $314,279 that isn't going to buy much. -said he's "watching" the recent "tendency...to longer amortizations and smaller down payments." He suggests it's not a problem now but "could become a concern over time."

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