When it comes to the term Mortgage, according to the survey done by the government, the outcome for that survey was that most of the Canadian’s don’t know their basic terms from their amortization.
A survey was conducted for the Financial Consumer Agency of Canada and the Bank Of Canada and it has been made public. When it comes to simple mortgage phraseology like “term” and “amortization” most Canadians are hopelessly confused.
According to the survey marginally, over half of the consumers failed to identify what “mortgage term” means correctly. Only 49% offer entirely accurate reply like “ the years you have a debt / contract term,” “the length of time you are committed to a mortgage rate,” or “the length of time before renewal”
Canadians have even more doubtful latch on to what basically “amortization” means. While, only 28% of the general population perhaps provide a proper definition of the word. They also provided certain points which made it clear that they do not exactly know what they are talking about.
So basically, the amortization period is the length of time it will take you to completely pay off a debt which generally is 25 years while the mortgage term is the length of time you apply to a specific mortgage rate and condition with the lender which usually is 5 years..
While the above feedback from the survey reviewed the debt knowledge of the general public, even those people precisely selected in the survey who have a home owner’s loan or plan to buy property in the near future had a pretty better understanding of mortgage basics.
“The responses indicate that there is a significant lack of knowledge about mortgage terms among both the general population and the target audience,” wrote the author of the survey. The survey, which was published, was conducted by Ipsos Public Affairs and involved interviews with more than 5,000 Canadians.
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