Report breaks down Canadian mortgage market

Every fall the Canadian Association of Accredited Mortgage Professionals releases a report on the state of the residential mortgage market in Canada. In it you’ll read that amortizations are decreasing, rate discounts are increasing and Canadians have flocked to the fixed rate.

The following are some highlights from the report:

– 8% of Canadians believe there will be a housing bubble burst in the next five years (shows strong consumer confidence, strange though with all of the media outlets scaring us of a bubble).

– 82% of new mortgages were fixed rate mortgages – for homes purchased in 2013. As of late though, variable rate spreads have made it a little bit more attractive to accept a variable vs. fixed.

– 2% of buyers with less than 20% down payment who chose a variable or adjustable rate mortgage. Estimates show that this has to do with new qualifying rules affecting this low figure.

– 16% of mortgages had amortizations over 25 years versus 34% for homes purchased between 2008-2010. This likely has to do with government rule changes more than any other factor. To add to this, mortgages are being repaid (vs. their original amortization) at a rate of 30% faster than any time in the past two decades, meaning Canadians are taking advantage of their prepayment privileges.

– 2.15% is the average discount from posted rates for the five-year fixed rate mortgage, while 86% of borrowers with less than 20% down chose a fixed rate mortgage.

– 40% of Canadians chose their new mortgage through the mortgage brokerage channel.

– 42% of new mortgages were obtained through the banks, while the remaining would come directly from credit unions and other non-bank lenders.

– 70% of Canadians have more than 25% equity.

– 57% of buyers in 2013 have been first-time buyers, approximately 250,000 so far this year. This figure is much higher than normal as targets for this category are in the 40% range.

– There are 9.52 million home owners in Canada and 5.58 million of them have mortgages with 3.94 million of them being mortgage-free. The home ownership figures are up 200,000 over 2012.

This is a summary of the report that was produced by Will Dunning, chief economist of CAAMP. For full details of the report, visit www.CAAMP.ca.

Jean-Guy Turcotte is a Red Deer Mortgage Broker at Dominion Lending Centres – Regional Mortgage Group.

Just Posted

WATCH: 2010 Olympic architect John Furlong inspires Red Deerians at Chamber event

Furlong suggests Red Deer should get involved with Calgary’s 2026 Olympic bid

Red Deer RCMP recent arrests include stolen vehicles, break and enters and drug charges

RCMP continue their focus on repeat offenders as part of the Pinpoint crime reduction strategy

Red Deer RCMP investigate armed convenience store robbery

Suspect fled on foot with undisclosed amount of cash and cigarettes

Bringing light to the work RNs do at Arnet Lantern Walk

Red Deer event takes place Sept. 28th at Bower Ponds

City approves $50,000 to support CFR opening ceremonies

Canadian Finals Rodeo expected to generate $25 million annually

U.S. congressman issues dire warning to Canada’s NAFTA team: time is running out

Canadian Foreign Affairs Minister Chrystia Freeland is expected to resume talks with the U.S.

Researchers tag great white shark in Atlantic Canada

Information will be used to learn more about where white sharks move in Canadian waters

Mix-up of bodies leads to funeral home reforms in Nova Scotia

One woman was was mistakenly cremated, another was embalmed and presented to family members during a visitation that went horribly wrong

Federal stats show slight increase in irregular migrant claims in August

113 extra people tried to cross the Canadian border last month

1st private moon flight passenger to invite creative guests

The Big Falcon Rocket is scheduled to make the trip in 2023, SpaceX founder Elon Musk announced at an event Monday at its headquarters near Los Angeles.

‘Game of Thrones,’ ‘Mrs. Maisel’ triumph at Emmys

In a ceremony that started out congratulating TV academy voters for the most historically diverse field of nominees yet, the early awards all went solely to whites.

Korean leaders meet in Pyongyang for potentially tough talks

South Korean President Moon Jae-in began his third summit with North Korean leader Kim Jong Un on Tuesday.

Russia blames Israel for plane shot down by Syrian missile

A Russian reconnaissance aircraft was brought down over the Mediterranean Sea as it was returning to its home base inside Syria, killing all 15 people on board.

Most Read