TORONTO, March 12, 2020 /CNW/ - A new report from Canada's voice of the mortgage profession provides a clear picture on the state of Canada's mortgage market and the considerations of prospective homebuyers. The report shows that Canadians continue to see home ownership as an important element of their long-term financial plans, and as an important contributor to family stability. Further, homebuyers are often paying off their mortgages faster than the set amortization period, and maintaining their debt-to-assets ratio.
The report, titled the Annual State of the Residential Mortgage Market in Canada, was released today from Mortgage Professionals Canada (MPC), the national industry association for mortgage brokers, lenders, insurers, and industry service providers.
"Despite the narrative in higher-priced housing markets that the primary driver for homebuyers is a 'fear of missing out' phenomenon, our report which included a wide survey of Canadians in these regions in fact ranked the 'prestige' of home ownership dead last on a list of 18 considerations." said Paul Taylor, CEO of MPC. "Encouragingly, the top four considerations for these homebuyers were monthly carrying costs, down payment savings, the potential change in house prices (up or down), and potential future earnings."
These considerations are in line with the prudent home ownership habits that we have seen from Canadians over the last decades. Canadians, be it first-time home buyers or current home owners, continue to exercise caution in their decision-making while pursuing their dream of home ownership, which is still held by the vast majority of individuals. Home ownership is one of the most effective mechanisms to build equity and save for the future.
"Canadians have also remained prudent with their spending habits on housing, which is evidenced in today's report. For example, Canadians pay off their mortgages much quicker than their original amortization, and each year 1 in 3 borrowers making some additional contribution to accelerate their repayment schedule." added Will Dunning, MPC Chief Economist and the report's Author. "Overall mortgage growth seems to be dampened by homeowners' aggressive mortgage repayments in our low interest rate environment."
Further supporting this evidence is the fact that while Canadians' debt-to-income ratios continue to rise, the debt-to-assets ratio for home owners remains flat, suggesting that the majority of Canadians' debt increase is for sound financial reasoning, even in our high-priced markets.
Mortgage Professionals Canada is the national mortgage industry association whose members include mortgage brokers, mortgage lenders, mortgage insurers and industry service providers. The association represents over 12,000 individual members and over 1,000 businesses across Canada.
SOURCE Mortgage Professionals Canada
For further information: Rita Rahmati, Public Affairs, Mortgage Professionals Canada, C: 647-289-9774, [email protected]