Summary of CAAMP’s “State of the Residential Mortgage Market in Canada” Report

November 15, 2010 § Leave a comment

This year CAAMP (Canadian Association of Accredited Mortgage Professionals) surveyed 2,005 Canadians for their Annual “State of the Residential Mortgage Market In Canada’ Report. More than one-half of the sample (1,174 Canadians) were home owners with mortgages and the remainder were renters, home owners without mortgages, or others who live with their families and are not responsible for mortgage payments or rents.

We will overview some significant statistics taken from the 45-page report. We hope that you will be able to gauge your own situation from the average results.

First we will address the whole concept of a ‘Housing Bubble’. We have always been under the impression that the notion was very much a product of media hype and skepticism.

When consumers were asked if they thought that we (in Ontario) were in a housing bubble, an overwhelming amount gave a neutral response (6.0 on a scale of 10). Further, many consumers believe that “Now is a good time to buy”, and there are high expectations for moderate increases in home values.

Further to that, when Canadians were asked “As a whole, do Canadians have too much debt?” The vast majority of those surveyed agreed with this statement (7.87/10). However, when then asked on an individual level if they “regret taking out the size of the mortgage they did” very few agreed with that notion (3.86/10). What we can gather from this disparity is that the fearful opinions about Canadians taking on too much debt have largely been influenced by the media more so than the actual behavior of Canadians when they reflect on their own personal situation.

Also included in the Report are statistics relating to Variable vs. Fixed rates: always an interesting topic to follow.

66% – Fixed Rate

29% – Variable/Adjustable Rate

4% – Blended

During the past 3 years, variable rate mortgages have been considerably lower. Recently, with the spread between fixed and variable being even more striking, it seems that Canadians are still not willing to chance it.

 

The average rate that Canadians are paying is 4.22% interest (down from 4.55% interest last year). For those who refinanced or renewed in the last year, their rate is 1.09% lower than it was before on average.

Another 18% of mortgage borrowers took equity out of their home in the past year with an average amount of $46,000. The most common uses for this loose equity were for home renovations and debt consolidation.

What we can take from this report is that many Canadians are comfortable with the current state of the residential mortgage market.

If you have any questions or remarks, please don’t hesitate to comment or contact us.

Johnpanagakos@bellnet.ca

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