Canadian Association of Accredited Mortgage Professionals releases Annual State of the Residential Mortgage Market in Canada report
TORONTO, Nov. 9, 2011 /CNW/ - Canadians have heard the many cautions
about carrying too much debt and are taking action to insulate
themselves from future economic downturns, according to the seventh Annual State of the Residential Mortgage Market report by the Canadian Association of Accredited Mortgage Professionals
(CAAMP), released today.
About one-third (32 per cent) of homeowners with mortgages had some
mortgage activity in 2011, with 23 per cent renewing or refinancing
Fixed rate mortgages remain most popular (at 60 per cent), while 31 per
cent have variable rate mortgages
Among those who renewed their mortgage in the past 12 months, 78 percent
saw a reduction in their rate
Among those who renewed or refinanced their mortgages in the last year,
21 per cent changed lenders
Levels of equity takeout have dropped in 2011 - only 10 per cent of
mortgage holders took out equity in the last year, a 40 per cent drop
"Overall, our survey paints a picture of Canadians generally and
homeowners in particular as very focused on their finances. They are
planning ahead, aggressively paying down their mortgage in advance of
any further economic jolt,"" said Jim Murphy, AMP, President and CEO of
CAAMP. "Prudent is the word that best sums up how Canadians are feeling
at this time."
Canadians secure in their own positions; skeptical about others
The 2011 survey found an interesting contrast between individuals' own
debt levels and their feelings towards other Canadians' financial
positions. Forty-six per cent of respondents agreed that "as a whole,
Canadians have too much debt" and many believe that "low interest rates
have meant that a lot of Canadians, who probably should not have,
became homeowners over the past few years."
However, among those with a mortgage, most disagree with the statement
"I regret taking on the size of mortgage I did" and a substantial
number agree that mortgage debt is "good debt." Canadians also agree
overall that "real estate in Canada is a good long-term investment."
And, despite being concerned about overall debt levels of Canadians,
they believe that they personally have acted responsibly.
Canadians could weather a potential storm
Canadians have insulated themselves by shopping for the best interest
rates with the help of a mortgage broker whose market share has
increased. Among those who renewed a mortgage in the past year, the
number who switched lenders was up to 21 per cent in 2011. At the same
time, three quarters of Canadians who renewed or refinanced their
mortgage this year saw a decrease in their mortgage rates. For a five
year fixed rate mortgage, the average discount has been 1.46 per cent
during the past year. And fewer Canadians have taken out equity, down
to 10 per cent in 2011.
By comparing rates with different mortgage lenders, aggressively paying
down their mortgages, and decreasing the amount of equity they take out
of their mortgages, most Canadians appear to be in a comfortable
position to weather the economic challenges ahead. In fact, eighty-four
per cent of mortgage holders said they can handle an increase of $200
per month in their mortgage payments, and 78 per cent have at least 25
per cent equity in their homes.
"Despite less than positive feelings towards the economy, or maybe
because of that, Canadians are showing a level of prudence in their
decisions that is inspiring," said Murphy. "That suggests to us that
there is no need for policy makers to introduce new measures that would
reduce housing activity."
The report is authored by CAAMP Chief Economist Will Dunning and based
on information gathered by Maritz Research Canada in a survey of
Canadian consumers conducted in October 2011.
The CAAMP survey report contains a wealth of industry information,
including consumer choices and borrowing behavior, opinions on current
"hot topics" related to housing and mortgages, regional breakdowns of
responses, and an outlook on residential mortgage lending. For a copy
of the report, please visit www.caamp.org.
Established in 1994, the Canadian Association of Accredited Mortgage
Professionals (CAAMP) is Canada's national mortgage industry
association. CAAMP has assumed a leadership role in the industry it
serves and has set the standard for best practices for Canada's
mortgage practitioners. In 2004, CAAMP created the Accredited Mortgage
Professional (AMP) designation as part of an ongoing commitment to
increasing the level of professionalism in Canada's mortgage industry.
As a membership-based organization, CAAMP strives to develop its network
of professionals and to represent the interests of these individuals to
government, media and consumers. CAAMP has attracted 12,500 members and
1,700 companies from across Canada - representing over 90% of Canada's
mortgage activity. CAAMP members make up the largest and most respected
network of mortgage professionals in the country. CAAMP's membership
base consists of mortgage lenders, brokers, insurers and other industry
SOURCE Canadian Association of Accredited Mortgage Professionals
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