We've never bought a house in the US, but I know enough about it to see that Canada is a bit different. I know Wikipedia isn't always the most reliable information source, but here is an interesting comparison nonetheless:
While homeownership rates in both countries are very high compared to worldwide (or even developed countries), the United States has a slightly higher level of homeownership at 68.9% versus 67% for Canada.
The narrow gap is interesting as the U.S. has implemented many incentives for homeownership, whereas Canada has no notable incentives. The most notable U.S. incentive for homeownership is the tax-deductible mortgage interest expense. In Canada, and many other countries, there is a prevalent view that this market distortion unfairly penalizes renters, who often have less income than owners.
I'm not sure how many Americans realize how unusual this tax deduction is--I know the UK had no such thing either--does anyone know of another country that does?
Some other differences:
*In Caronport, few people use a realtor. Most home sales are private, and the deal is then drawn up by a lawyer.
*We can make extra payments toward the mortgage, but if we pay off the mortgage early (even due to selling the house) then we pay a penalty worth 3 months of mortgage interest, unless we take on another mortgage with our same bank (Royal Bank of Canada).
*Most mortgages have a term of 3-7 years with the same interest rate, and then we take on another one. Our house should be paid off in 25 years, or perhaps a bit less, as we opted for a biweekly payment.
*I'm still pretty amazed that the bank gave us a mortgage at all, given that we are living here on one-year work permits until we gain permanent residency!
Doing the impossible
1 day ago