The latest report from the Canadian Association of Accredited Mortgage Professionals (CAAMP) indicates that Canadians are comfortable with their mortgage debt levels, and reaffirm that their mortgages are a form of "good debt."
The Annual State of the Residential Mortgage Market in Canada also shows that Canadians are increasingly turning to mortgage brokers when shopping for a mortgage. In fact, the broker share of the mortgage business rose from 25 to 28% since 2012 with 40% of all new mortgages obtained in 2013 going through a mortgage broker. Banks and other financial institutions accounted for 42% of new mortgages.
Jim Murphy, CEO of CAAMP, summarizes the findings: "Consumer confidence in the mortgage market remains high, especially among people who have owned homes for a longer period. Consumers are paying off their mortgages faster, selecting five-year fixed term rates and agreeing that real estate is a good long-term investment."
Other significant findings include that more than 80% of Canadian homeowners have at least 25% equity in their homes and of the new homes purchased in the past year, 57% were from first time buyers.
Interestingly, 38% of Canadians accelerated their mortgage repayments by choosing to make lump sum payments, increasing the amount of each payment or making payments more frequently.
Not all the news was upbeat, however. CAAMP Chief Economist Will Dunning, who authored the report, projects a weakening housing market by 2014 with a 12 to 17% reduction in starts compared to 2010 to 2012.