If you aren't familiar, the Gong Show was a television variety show spoof that was broadcast from 1976 until 1980. Each show presented a contest between amateur performers of often dubious talent, with a panel of 3 celebrity judges. If the judges considered an act to be particularly bad, they hit a gong to end it immediately.
I am introducing what I hope to be a regular Thursday post called "The Gong Show" in which I will feature a dubious financial product that I think deserves to be gonged. There are many financially suicidal products out there so I have a feeling that I won't run out of material any time soon.
For this weeks gong show I am featuring the 40 year amortization mortgage. Available at most Canadian financial institutions and mortgage companies now, the 40 year mortgage is certain to get the gong from prudent financial managers who think that enslaving yourself to a mortgage is not a good use of the freedom we enjoy in Canada.
Lets see, if you purchase your first home at age 30 and because real estate prices are so nuts the only way you can afford the monthly payment is by going with a 40 year mortgage, you will be paying off your home until age 70. Hmmmm . . . . well, gosh, golly, I never knew it could be so good, sign me up!
What do you think? Should the 40 year mortgage get the gong? Why?