One-fifth of those with over $500,000 in investible assets have a
mortgage, with an average size of $157,000
WINNIPEG, July 2, 2014 /CNW/ - A recent survey of high net worth
Canadians, those with investable assets of $500,000 or more, reveals
that for this group, having a mortgage may be a considered and
deliberate investment strategy. Sixty-seven per cent of those who have
a mortgage indicated they have the cash available to pay for their home
"The notion that a mortgage is used only when funds aren't available to
pay cash for your home doesn't ring true for many wealthy Canadians,"
says Peter Veselinovich, vice-president of banking and mortgage
operations at Investors Group.
The Investors Group survey, which examined how high net worth Canadians
are using their mortgages, highlights strategies that touch on a
variety of financial planning tactics that range from tax planning to
income generating rental properties.
Property ownership is part of the plan
Overall, seven-in-ten high net worth Canadians say they would not think
about purchasing property without reviewing it as part of their overall
financial plan and almost half (46 per cent) say they wouldn't make
changes to their mortgage without reviewing it as part of their overall
financial plan. One-in-five were provided advice by their financial
advisor on mortgage options that would best suit their financial
Property ownership by the numbers:
32 per cent of high-net-worth Canadians own additional commercial or
1-in-10 own three or more;
51 per cent have additional properties for recreational use;
42 per cent have investment rental properties;
11 per cent have purchased property for their parents or children to
"It's good to see that some Canadians are including these important
decisions as part of their overall financial plan and engaging experts
for advice," says Peter. "Your current and future business strategy,
retirement plans, stage of life and overall financial goals will all
influence the mortgage you select."
Mortgages in retirement
While some Canadians plan to pay off their mortgage before retirement,
more than one-quarter of wealthy Canadians (with mortgages) don't have
plans to become mortgage-free before retirement.
"Cashing in investments to pay off your mortgage before retirement could
trigger capital gains. That would mean additional taxes and less money
to invest," says Peter. "Retirees in this financial demographic who are
not concerned about meeting their mortgage payments see a tax advantage
to maintaining a low-interest mortgage on their homes."
Limited fear over rising rates
When asked if they were worried about rising rates in the next year,
three years or five, those with any concern amounted to eight per cent,
14 per cent, and 18 per cent of the overall group in each respective
"While fluctuating interest rates can play a role in selecting a
mortgage that fits with your financial situation, there are a number of
additional considerations that Canadians need to factor into the
equation," adds Peter. "A financial advisor can help you look at the
entire picture and select an option that will work for you."
To learn more about Investors Group mortgage offerings, visit InvestorsGroup.com
About the Survey Methodology
Data was collected using computer assisted web interviewing (CAWI) via
Harris/Decima's proprietary online panel. Overall, 1,009 general
population completes were collected nationally between April 2 and
April 12, 2014. In addition, 500 completes were collected from high net
worth individuals, defined as those with household investable assets
(excluding property) of more than $500,000. For the general population
sample, quotas were set by gender, age and region. The general
population data were weighted in tabulation to replicate actual
population distribution by age and gender within region according to
the 2011 Census data.
About Investors Group
Investors Group, founded in 1926, is a national leader in delivering
personalized financial solutions to Canadians through a network of
approximately 4,800 Consultants located throughout Canada. In addition
to an exclusive family of mutual funds and other investment vehicles,
Investors Group offers a wide range of insurance, securities, mortgage
and other financial services. Investors Group is a member of the IGM
Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of
Canada's premier financial services companies with approximately $138
billion in total assets under management as of May 31, 2014.
Image with caption: "High net worth Canadians and mortgages (CNW Group/Investors Group Inc.)". Image available at: http://photos.newswire.ca/images/download/20140702_C9313_PHOTO_EN_41817.jpg
SOURCE: Investors Group Inc.
For further information:
Lisa Bodnar/McKenna Wild
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