New data reflects current Canadian market status

A couple of times per year the Canadian Association of Accredited Mortgage Professionals (CAAMP) release some statistical data that is noted as some of the best information in our market.

This survey is filled with data from how quick borrowers are prepaying their mortgage to the ratio of people who miss payments and everything in between.

According to the report the value of all owner-occupied housing in Canada is valued at $3.48 trillion dollars and there is $1.15 trillion of mortgages outstanding on those homes. There are $13.7+ million households in Canada of which 9.85 million are owner occupied and about 4.1 million are renters. There are 5.85 million households with mortgages and the average amount of principal outstanding is $170,000.

In 2011, $138 billion dollars of mortgage funds were required to purchase 600,000-625,000 homes (this includes new mortgages, ports and assumptions) and a total of 750,000 homes were purchased that year.

The average mortgage size across Canada for purchases was $224,000. There were 150,000 purchases that did not require a mortgage and there were 200,000 Canadians that paid off their mortgage.

There are two million households in Canada with both a mortgage and Home Equity Lines of Credit (HELOC) and have an average of $58,600 owing on the HELOC, and there are 625,000 households with only a HELOC but no mortgage, and the average owing on those HELOCS is $70,700). The average equity for an owner with only a mortgage is 49%, the average equity for a homeowner with both a mortgage and a HELOC is 41%, but the average equity for a homeowner with solely a HELOC is 82%, indicating that these homeowners use this structure solely as a back up and rarely use them. There is less than 5% of the homeowner population with less than 10% equity and 83% of homeowners have more than 25% equity, indicating strength in our housing industry.

Last year 18% of mortgage holders took equity out of their homes, the average size is $43,500 and this accounted for $29 billion in mortgage growth, and another $16 billion in HELOC growth.

Top uses for equity take-outs were $17.25 billion went towards renovations, another $10 billion for investments, $9.25 billion to consolidate and $7.5 billion was for purchases and education and $2 billion went towards “other” choices.

The average discount off of posted interest rates is 177bps, telling me that a lot of people are still going to the branch for their mortgages as the average discount at the broker level is 200bps off of posted. As per usual 65% of mortgages have fixed mortgages, and 29% have variable or adjustable mortgages while 7% have a combination mortgage (also called hybrid mortgages, these can be part fixed part variable). Seventy-one per cent of renewing mortgagors did not change their rate type and 12% went from fixed to variable, and 14% of those with variable rate mortgages locked in their rates.

One can read through the information and find a positive outlook on the housing and mortgage industry. Most Canadians have a lot of equity, adding stability to our economy, and most of us are hedged with fixed interest rates to secure themselves from the inevitable rate increases to come. More information to come next week.

Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres-Regional Mortgage Group and can be contacted for appointments or questions at 403-343-1125 or emailed to