While you may see many reports out there about Canadian housing bubbles, according to a report just released by the Canadian Association of Accredited Mortgage Professionals (CAAMP), the vast majority (93%) of mortgage holders have never missed a payment. Out of 7% who have, 4% (57%) did so during the past year.
• Concern about rising rates is offset by increasing home equity
• Many mortgages were renegotiated at lower rates; amortization periods are declining
• Many Canadians have used cost savings from low rates to pay more than required, providing flexibility to deal with mortgage rate increases
• Mortgage debt is a priority: the vast majority of Canadians have never missed a payment
• A high percentage of Canadians still believe it is a good time to buy a home
The report entitled Prudence Paying Off For Canadian Mortgage Borrowers and is available on the CAAMP site.
- the average outstanding principal is $138,000
- the average amount of equity represents 53% of the average value of homes ($297,000). Approximately 11% of mortgage borrowers withdrew equity from their home in the past year, totaling $20 billion, a 41%reduction compared to the $34 billion estimate of 2009.
- 65% of mortgages last year were at a fixed rate, 29% variable or adjustable, 6% are combination mortgages.
- Most terms are long: 70% are five years or longer, 9% have short terms of two years or less, and 21% have terms of three or four years.
- Out of the 65% with fixed rates, 12% locked in from a variable rate during the past 12 months and another 10% had locked in more than a year
- 16% voluntarily increased payments
- 13% made lump-sump payments