Profile of Mortgage Holders
There are currently about 9.3 million home owners in Canada, of whom about 5.55
million have mortgages.
About one-quarter (24%) of home owners had some form of mortgaging activity during
the past 12 months: taking out a new mortgage on a home that was newly purchased or
which previously did not have a mortgage (7%), renewing, refinancing or transferring an
existing mortgage (17%), or paying off an existing mortgage (3%)
The remainder (76%
of home owners) did not have any mortgaging activity during the year.
Equity Take-Out
About 11% of mortgage borrowers took equity out of their home in the past year. The
average amount is estimated at $33,500. These results imply that the total amount of
equity take-out during the past year has been $20 billion, a substantial reduction
compared to the $34 billion estimate found in the spring 2009 survey. The reduction is
the consequence of the recession, which resulted in increased caution on the part of
both lenders and borrowers
Mortgage Types, Terms, and Amortization Periods
Among mortgages that have been transacted during the past year, 65% have fixed
rates, 29% have variable or adjustable rates, and 6% are combination mortgages.
Most mortgages have long terms: among those transacted in the past year, 70% have
terms of five years or longer, just 9% have short terms of two years or less, and 21%
have terms of three or four years.
During recent years, mortgages with longer mortgage amortization periods have become
increasingly popular, but the share seems to have stabilized. For mortgages originated
during the past year, 64% had amortization periods of 25 years or less and 36% had
extended amortization periods.
Payment Increases and Lump Sum Payments
During the past year, 16% of Canadian mortgage holders voluntarily increased their
regular mortgage payments. The amount of increase is estimated at about $150 million
per month, or $1.8 billion per year, if sustained. More than one-half of the increases (an
annualized $950 million) were made by people who purchased their homes during 2005
to 2010.
In addition, 13% of mortgage holders made lump sum payments, for an estimated total
amount of $7.8 billion, or about 1% of the total outstanding mortgage principal. 65% of
the total (just over $5 billion) was made by people who purchased their homes during
2005 to 2010.
Missing Mortgage Payments
The vast majority (93%) of mortgage holders have never missed a payment; 7% have
missed a payment at some time. This includes 4% who have missed a payment during
the past year.
Fixed Rate Versus Variable Rate Mortgages
The CAAMP/Maritz study found that among mortgage holders 64% (3.6 million
households) have fixed rate mortgages, 31% (1.7 million) have variable and adjustable
rate mortgages, and 5% (300,000) have “combination” mortgages, in which part of the
payment is based on a fixed rate and part is based on a variable rate.
Among mortgages that have been transacted during the past year, the proportions are
essentially the same as the shares shown above for all mortgages: 65% fixed rate, 29%
variable or adjustable, and 6% combination