The product, which is available through select Manulife branches, allows customers to purchase up to 95% of the value of their home and pay minimal upfront costs. Additionally, customers are allowed to make interest-only payments on the mortgage for the first 10 years, and can choose to convert their loan to a longer-term amortization at any time during that period.
The BFS M1 mortgage offers advantages to both buyers and lenders. For buyers, it provides an opportunity to purchase a home with a relatively low down payment. Additionally, the flexibility of the interest-only repayment option allows customers to make payments each month that fit within their budget, potentially saving money in the long term.
For lenders, this type of product may offer an attractive option for borrowers who may be at risk of defaulting on traditional mortgages. By allowing customers to pay only interest on the loan for 10 years, lenders can recoup some of the losses they would incur from a defaulted loan earlier in the process. Additionally, because customers have the flexibility to convert their loan to a longer-term amortization at any point during the 10-year period, lenders are still able to profit from the interest earned on the mortgage.
In summary, Manulife’s BFS M1 mortgage is designed to provide buyers with flexible financing options and lenders with additional protection against loan defaults. Buyers benefit from being able to purchase a home with a low down payment and the ability to make interest-only payments that fit within their budget. For lenders, the product offers protection by allowing customers to pay only interest on the loan for 10 years and the option to convert the loan to a longer-term amortization if necessary. Overall, the BFS M1 mortgage provides an attractive option for both buyers and lenders.
Manulife’s new BFS M1 mortgage is designed to provide Canadian homebuyers with flexible financing options and lenders with additional protection against loan defaults. Through the mortgage, buyers are able to purchase up to 95% of the value of a property with minimal upfront costs and make interest-only payments for the first 10 years. This relieves some of the financial burden associated with buying a home and helps buyers keep their payments within their budget.
Additionally, for lenders, the BFS M1 mortgage provides more security than traditional mortgage products. Instead of incurring potential losses from a loan default, lenders have the advantage of customers paying interest-only for 10 years, as well as the potential to convert the loan to a longer-term amortization if necessary, thus giving lenders the opportunity to earn more interest over time.
Overall, Manulife’s BFS M1 mortgage offers both buyers and lenders attractive options. For buyers, it provides an opportunity to purchase a home with a low down payment and make manageable payments. For lenders, the product gives them greater security, knowing that customers have the option to pay only interest on the loan for 10 years or convert their loan to a longer-term amortization if needed.
This article was contributed on Oct 17, 2023
