A new report indicates that Canadian homeowners are managing
their mortgage debt responsibly. The Canadian Association of Accredited
Mortgage Professionals (CAAMP), in its annual report, said that 84% of Canadians
holding mortgages could afford to pay an extra $300 towards monthly payments.
This is good news for mortgage lenders
and the Canadian housing market in general, especially considering that the
country’s outstanding home mortgages crossed $1 trillion in August, an increase
of 7.6% from 2009.
As reported in the Financial
Post, in the last fifteen years, residential mortgage volumes have expanded
by 7.5% a year. The biggest growth was seen between ’04 and ’08, with an
increase of more than 10% every year. The report also revealed that 35% of
Canadian mortgage holders had gone the extra mile and increased monthly
payments or made lump-sum down payments over the last year, with 7% doing both.
CAAMP president and CEO Jim Murphy said that Canadians were
taking their mortgage repayment responsibility seriously, building home equity
and making long-term, sound mortgage decisions. He added that the strength of
the Canadian mortgage market was very evident in comparison to the sorry state
of the market in the United States.
Up to 89% of Canadian homeowners had a home equity of at least
10% with 80% having a home equity of above 20%. 18% of Canadians who used their
home equity to generate cash last year used it to pay towards debt. The survey
also revealed that 66% of Canadians applying for new mortgages were choosing fixed
rate loans, with the 5-year term being the most popular choice.
