I have never heard of this (that there are no interest rates in Canada). I am going to need some 'proof' on this though (would make for a good read)
Also, I am not talking about worldwide...US based website and forum. -I would not even pretend to know what goes on in other countries
rawsavon
It's just a banking structure you can opt for when asking for loans. The bank will buy the house, you will pay "rent" every month until it's paid off and then the bank will transfer ownership of the house to you afterwards, interest rate free and the risk of default is shared between you and the bank. It's an option not too many people are aware of unfortunately.
How does the bank profit from this though?
They buy the asset and sell it to you at a higher price. There are no fees if you are late with your payments and the bank asks for collateral in case you default.
It's just a banking structure you can opt for when asking for loans. The bank will buy the house, you will pay "rent" every month until it's paid off and then the bank will transfer ownership of the house to you afterwards, interest rate free and the risk of default is shared between you and the bank. It's an option not too many people are aware of unfortunately.
Trinners
How does the bank profit from this though?
They buy the asset and sell it to you at a higher price. There are no fees if you are late with your payments and the bank asks for collateral in case you default.
Now I see. So they do charge interest (in a way). It is just included upfront (you pay it in an increased price for the home). Thank you :)
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