Stability in the Canadian Mortgage Market: Consumer Survey

Following a threatening, but short-lived recession, which ended two years ago, the Canadian economy is well into recovery. Housing has benefitted from the recovery, and in fact has played an important role. Rising housing values are encouraging consumer confidence and consumer spending, and this has been a major driver of job creation.

• There is currently $855 billion in mortgages on principal residences and $215 billion in Home Equity Lines of Credit (HELOC)
• Individuals with HELOCs only have an average 65 per cent equity in their homes
• HELOC prevalence is highest among middle age homeowners
• Equity takeouts amount to $26 billion annually, with most funds used for renovation ($9.4 billion), followed by investments ($5.0 billion)
• The average down payment for a home purchased in the last 12 months was 30%, up from 26% for homes purchased two years ago
• Among all borrowers, 63 per cent have fixed rate mortgages, 30 per cent have variable rate mortgages and 6 per cent have a combination of both
• Less than a quarter (22 per cent) of all borrowers have amortization periods longer than 25 years 
• 34 per cent of those who most recently renewed or renegotiated their mortgages did so before their term expired.  The average time to pay off a mortgage is 7.4 years less than the original amortization 
• 200,000 homeowners paid off their mortgages in the last 12 months
• The average mortgage interest rate discount is 1.44 per cent for those who chose a five year fixed rate mortgage in the last twelve months with the average mortgage rate being 4.04% 
• Of those who renewed their mortgages in the last twelve months, 65 per cent are paying lower rates than previously 
• 66 per cent of all mortgage borrowers can tolerate a monthly mortgage increase of $300 or more
• Among borrowers who took out a new mortgage in the last 12 months, 27% obtained it from a mortgage broker.  Overall mortgage broker share stands at 23% 
• Canadian appetite for home buying has returned to pre-recession levels, following a slide over the past three surveys. Almost 60 per cent respondents thought that now was a good time to buy
• Optimism is returning to the market with almost half (46 per cent) of those questioned saying that they expect prices to rise