is the canadian mortgage market stable?

A spring consumer report released recently by the Canadian Association of Accredited Mortgage Professionals (CAAMP) reveals that Canadians are displaying confidence by paying down their mortgages and using home equity to make improvements or investments. 

The report, Stability in the Canadian Mortgage Market, which was compiled by CAAMP Chief Economist Will Dunning, also includes information on consumer borrowing behaviour and an outlook on residential mortgage lending.

Following are some key statistics uncovered in the report:

  • Canadians currently have $855 billion in mortgages on principal residences and $215 billion in home equity lines of credit (HELOCs)
  • Equity takeouts amount to $26 billion annually, with funds most frequently used for renovations ($9.4 billion), followed by investments ($5.0 billion)
  • The average down payment for a home purchased in the last 12 months was 30%, up from 26% for homes purchased two years ago
  • Among all borrowers, 63% have fixed-rate mortgages, 30% have variable-rate mortgages and 6% have a combination of both fixed- and variable-rate mortgages
  • Less than a quarter (22%) of all borrowers have amortization periods longer than 25 years
  • The average time to pay off a mortgage is 7.4 years less than the original amortization
  • 34% of those who most recently renewed or renegotiated their mortgages did so before their terms expired.
  • 200,000 Canadian homeowners paid off their mortgages in the last 12 months
  • The average mortgage interest rate discount is 1.44% for those who chose a five-year fixed-rate mortgage in the last 12 months, with the average mortgage rate being 4.04%
  • Of those who renewed their mortgages in the last 12 months, 65% are paying lower rates than previously
  • 66% of all mortgage borrowers can tolerate a monthly mortgage increase of $300 or more

Canadians’ appetite for home buying has returned to pre-recession levels, following a slide over the past three surveys. Almost 60% of respondents thought that now was a good time to buy. Optimism is returning to the market with almost half (46%) of those questioned saying that they expect prices to rise.

As always, if you have any questions about the best mortgage product and rate options for you, or about your mortgage in general, I’m here to help!

Angela Slager

Angela Slager

CENTURY 21 Heritage House Ltd., Brokerage*
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