Prudence Paying Off For Canadian Mortgage Borrowers – Spring 2010
• Almost 80 per cent of young borrowers have opted for a fixed rate mortgage or a mortgage that combines fixed and variable rates.
• A small number of mortgage consumers (17 per cent) have amortization periods of more than 25 years and the share of mortgages with extended amortizations has stabilized – a year ago the share was also 17 per cent.
• Among borrowers who have renewed a mortgage in the past 12 months, almost three-quarters received a reduction in their interest rate. On average, interest rates were reduced by 1 percentage point on mortgages renewed in the past 12 months.
• 16 per cent of mortgage borrowers have increased their monthly payments beyond required amounts. Combining the data obtained in the survey, the total increases amount to about $150 million per month or $1.8 billion per year if those increased payments are sustained.
• 13 per cent of mortgage borrowers made lump sum payments, with an estimated total of $7.8 billion, equivalent to 1 per cent of the total outstanding mortgage principal.
• For new mortgages, 50 per cent were obtained from a bank, 30 per cent from a mortgage broker, and 20 per cent were obtained from another source.
• Mortgage brokers are used most often in Alberta (32 per cent), B.C. (29 per cent) and Ontario (26 per cent) compared to the Maritimes (19 per cent), the Prairies (17 per cent) and Quebec (14 per cent).
• The total volume of the residential mortgage market is expected to pass the $1 trillion mark mid-year and by the end of 2010 would be in the range of $1.04 trillion. By the end of 2011, the forecast is $1.13 trillion to $1.14 trillion.