Is it ironic that we published a post this morning about how housing is becoming less affordable in Canada – and now, just a few hours later, we talk about a report showing that most Canadians are comfortable with their current mortgages? But while many may think that our conflicting views with actual affordability is one more sign that our heads are stuck in the sand, we might be so comfortable with that debt because we’re trying very hard to pay it off!
This is according to a survey published by the Canadian Association of Accredited Mortgage Professionals (CAAMP) called Confidence in the Canadian Mortgage Market. The survey showed several things but the main thing to take away from it is that Canadians are trying to pay off their mortgages; and they have a few ways of doing it. Here is the breakdown of the numbers:
- 23 per cent of Canadians are increasing their monthly payments,
- 19 per cent are making lump sum payments when they can to bring the amount down,
- 10 per cent of Canadians are increasing their payments and making lump sum payments when they can,
- Approximately 50 per cent of Canadians are paying at least $100 a more a month on their mortgages than is necessary,
- Those who purchased recently said that their amortization schedule will be about 20 per cent shorter than what it states in their contract,
- 31 per cent of homeowners said that they sought the advice of a Toronto mortgage brokers, or brokers in other parts of the country, when obtaining their mortgage, and
- 83 per cent of Canadians have at least 25 per cent equity in their home.
This last stat is particularly encouraging, as the more equity a person has in their home the more they own and the less likely it is that the home will sink “underwater” (when a person owes more on their home than they own.) But in addition to how and when homeowners are making payments, the survey also showed some other interesting stats pertaining to mortgages, and the amount our country holds.
- Canadian homeowners currently have about $994 billion in mortgage debt collectively; and $161 billion in home equity lines of credit in Canada,
- The amount of home equity Canadians currently own is collectively $214 billion,
- Among homeowners 65 per cent currently hold fixed rate mortgages, 29 per cent hold variable mortgages, and 7 per cent of homeowners have a combination of both,
- In 2011, the average mortgage rate was 3.64 per cent. Not surprisingly, that was down 4.0 per cent from 2010. Those that just bought a home might get the lowest rate of them all, with recent rate averages being around 3.48 per cent.
