Canadians are Saving Money on Refinancing – and You Can Too!

Things have been good for the Canadian economy in the past 10 – 11 months or so. And despite naysayers touting that interest rates are going to spike, and that we’re not saving enough for that potential economic downfall, that’s just not happening. In fact, the opposite is true.
The Canadian Association of Accredited Mortgage Professionals (CAAMP) has just reported that this past year, Canada mortgage holders saved a whopping $2.7 billion dollars on their mortgage just by refinancing or renewing. This, despite tighter rules on HELOCs and home equity loans imposed by the federal government at about the same time our economy started turning around. So it seems we are saving. And those interest rates? You can expect those to stay low for about another year too.
We all remember when the federal government imposed new rules on borrowing against home equity in the beginning of the year, dropping the amount eligible for borrowing from 90% to 85%. So was this stringent measure the reason for Canadians saving so much money? It might be, even though refinancing was one of the major reasons for the huge savings. The CAAMP report also indicated that the number of homeowners borrowing against their own home equity had also dropped – from 40% last year to only 10% this year. That’s a major drop, and more Canadians with even more money in their pocket!
Renewing – and not refinancing – has also been one of the major players in the reason for why Canadians are starting to save so much more of their hard-earned cash. 32% of Canadians said that they made some change to their deduction with almost two-thirds of Canadians renewing or refinancing their Canada mortgage this year. And – are you ready for this – 78% of Canadians who renewed their mortgage received a deduction for their troubles! And, as some Canadians know, renewing doesn’t mean keeping everything but the term the same. 21% of the group that renewed or refinanced their mortgage said that they went with a different lender in order to take advantage of savings.
So as a whole, we saved money last year. That’s great, but what about next year? Well, we’re likely going to save money then too. A poll by Reuters that was published yesterday showed that the Bank of Canada is not likely going to raise interest rates until the end of 2012. And seeing as how that figure keeps getting pushed further and further away, it seems that Canadians might save even more, for even longer!