according to the spring survey report on the residential mortgage market produced by the Canadian Association of
Accredited Mortgage Professionals (CAAMP)
TORONTO, May 11 /CNW/ - Many Canadians are aggressively reducing their
mortgages by making lump sum payments, increasing monthly payments and
reducing amortization periods, revealing confidence and financial
flexibility in a stable mortgage environment, according to CAAMP's most
recent survey report.
22 per cent of mortgage borrowers increased their payments during the
past year; 18 per cent made a lump sum payment; 9 per cent did both and
27 per cent who renewed increased their payments;
For mortgages repaid in the last 20 years, one third were paid off
For the first time, CAAMP has identified that Home Equity Lines of
Credit (HELOC) represent 22 per cent of all mortgages, making these
lines of credit a $215 billion industry;
On average, Canadian homeowners have $222,000 in home equity, equal to
66 per cent of the value of their homes;
During the past year, homeowners borrowed $26 billion in additional
equity from their homes. 15 per cent of homeowners withdrew equity,
Investments (28 per cent) replaced debt consolidation (19 per cent) as
the number two use of home equity takeout. Home renovations remain
number one (36 per cent).
The spring survey report, entitled Stability in the Canadian Mortgage Market, is a bi-annual review of the Canadian mortgage market authored by CAAMP
Chief Economist Will Dunning. The report is based on information
gathered by Maritz Research Canada in a survey of 2,000 Canadian
consumers in April 2011.
"Prudent management of their mortgage debt has paid off for Canadians,"
said Jim Murphy, AMP, President and CEO of CAAMP. "By taking advantage
of low interest rates, we have been paying down our mortgages. As
economic confidence returns in Canada, many survey respondents have
told us they now feel comfortable using some of that equity to improve
their homes and to invest," said Murphy.
Home Equity, Mortgages and HELOCs
For the first time, CAAMP asked Canadians to specify how they financed
their homes and withdrew equity. Of an approximate 9.45 million
homeowners in Canada, an estimated 1.87 million hold a mortgage and a
HELOC; approximately 770,000 have a HELOC only with no mortgage and
approximately 3.83 million have a mortgage only. Approximately 3
million Canadians have no debt on their homes.
Canadians hold $2.10 trillion in home equity and appear generally
comfortable. Quebec and Atlantic Canada lead the way in equity comfort
levels (81 and 82 per cent respectively). In contrast, homeowners in
Manitoba and Alberta have lower levels of comfort with their current
equity positions (31 and 29 per cent respectively).
While the CAAMP spring survey report reflects a positive outlook by
mortgage borrowers, Dunning cautions that the pace of the economic
recovery will remain modest in 2011 and 2012. "Mortgage credit will
continue to expand by about $80 billion (7.8 per cent) in 2011, down
from its peak of 13 per cent in 2008, but nevertheless a healthy
increase," Dunning said.
The CAAMP survey report contains a wealth of information on the mortgage
industry, including consumer choices and borrowing behaviour, regional
breakdowns of responses and an outlook on residential mortgage
lending. To read the complete report, visit www.caamp.org.
CAAMP is the national organization representing Canada's mortgage
industry. With over 12,000 mortgage professionals representing over
1,800 companies, its membership is drawn from every province and from
all industry sectors. CAAMP is the leading provider of service and
advocacy for its members and sets the standard for the Canadian
mortgage industry. In 2004, CAAMP established the Accredited Mortgage
Professional (AMP) designation to enhance educational and ethical
standards for Canada's mortgage professionals.
CAAMP's other primary role is that of consumer advocate. On an ongoing
basis CAAMP aims to educate and inform the public about the mortgage
industry. Through its extensive membership database, CAAMP provides
consumers with access to a cross-country network of the industry's most
respected and ethical professionals.
SOURCE Canadian Association of Accredited Mortgage Professionals
For further information:
Jim Murphy, AMP
President and CEO, CAAMP
O: 416-644-5465 / C: 416-940-0011