Fall mortgage report

Trends in the housing market are an important driver of the Canadian economy. Housing activity directly drives job creation, in the construction and real estate industries, with further impacts in the myriad of industries that support construction and real estate transactions by providing related goods and services.

Each year CAAMP, the Canadian Association of Accredited Mortgage Professionals, releases its annual mortgage market research report. There is always interesting information contained in this report for those of us working in the industry but here are a few key points that consumers should review and keep in mind to better manage their mortgage financing.

 

Mortgage Market

There are 5.64 Canadian homeowners with mortgages.

 

Interest Rates

2.89% - The average rate for homes purchased in 2014.

3.06% - This was the actual average rate for a 5 year fixed rate mortgage in 2014 which is a 1.85% discount from the typical ‘posted’ rate.

3.12% - The average rate for mortgages renewed in 2014.Why is this rate higher? This is partly due to the ‘sign and forget’ tendency among renewers. They accept the lender’s first renewal offer.

 

Home Equity

75%: Percentage of mortgagors who have 25% or more equity

 

Amortization Periods

17.5: The average number of years that buyers in 2013/2014 expect to take to repay their mortgages

 

Rate Types

76%: Percentage of recently purchased homes that have fixed rate mortgages

 

Types of Mortgage Representatives Consulted

55%: Percentage of borrowers who received their mortgages from a bank

30%: Percentage of borrowers who received their mortgages from a mortgage broker

(If true, this suggests less than half of Canadian mortgage consumers are leveraging brokers to scan the market for better deals — a major waste of a free option.)

 

Study Details

The data quoted from this report was commissioned by CAAMP and produced by Will Dunning, Chief Economist of CAAMP, in collaboration with Maritz. This report is based on online survey responses from 2,000 Canadians compiled during October 2014. 57% of those surveyed were homeowners with mortgages.

 

If you would like more information regarding the mortgage market or how you might save on your overall cost of borrowing, please give me a call at 250-826-3543 or email me at [email protected]

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.