Annual State of the Mortgage Market

Interviews this fall with more than 2,000 Canadians indicate that those holding mortgages are comfortable with their debt, a majority plan to pay off their mortgage in less than 25 years and at least one-third are taking advantage of current low interest rates to accelerate payments, according to the most recent survey report from the Canadian Association of Accredited Mortgage Professionals (CAAMP) released in late November entitled Annual State of the Residential Mortgage Market in Canada. Following are some key statistics revealed in the report:

• *Among all mortgage holders, 65% have fixed-rate mortgages, 28% have variable-rate mortgages and 7% have a combination. For mortgages in 2012, there has been a significant shift to fixed-rate mortgages – 79% are fixed, 10% are variable and 11% are a combination of both.
• *68% of mortgages obtained during 2012 have amortization periods of 25 years or less.
• *32% of mortgage holders are making significant efforts to accelerate repayments, including taking one or more of the following actions in the past year: 16% have voluntarily increased their monthly payments; 15% have made a lump-sum contribution to their mortgage; and 6% have increased their payment frequency.
• *For mortgages that have been repaid since the 1990s, actual repayment periods have generally only taken two-thirds of the contracted periods.
• *Among borrowers who took out a new mortgage in 2012, a record 47% obtained it from a mortgage broker.
• *The average mortgage interest rate is 3.55%, which is lower than last year's average of 3.92%.
• *Among mortgage borrowers who have renewed a mortgage this year, 61% experienced a reduction in their interest rate.
• *The average actual rate for five-year fixed-rate mortgages is 1.85 percentage points lower than typical (posted) rates in 2012.
• *There has been a considerable amount of locking-in (converting from variable rate to fixed rate). Among the 3.85 million *Canadian homeowners with fixed-rate mortgages, 13% locked in during the past 12 months.
• *Of the 9.7 million homeowners in Canada, 5.95 million have mortgages and 3.75 million are mortgage-free.
• *87% of Canadian homeowners have 25% or more home equity.

As always, if you have any questions about the information above or your mortgage in general, I'm here to help! Kupina Mortgage Team | www.kmortgage.ca | www.kupinamortgage.com