VALUABLE CANADIAN MORTGAGE STATS

The Canadian Association of Accredited Mortgage Professionals (CAAMP) regularly publishes comprehensive unbiased residential mortgage market statistics. Anyone trying to get a bead on the residential mortgage market – ergo the housing market – in Canada is advised to scope out CAAMP’s reports which are chock-full of useful up-to-date information. The CAAMP reports combined with the regularly-published Canada Mortgage & Housing Corporation (CMHC) reports are the best one-two punch available to people interested in the Canadian housing and mortgage market.

Most recently CAAMP published its 37-page November 2009 State of the Residential Mortgage Market along with its 1-page summary Significant Statistics. You can find both reports at FisgardMortgageNews . While you are on the site you may also wish to visit CMHC under the Fisgard Memberships & Affiliations tab.

Among a host of topics the CAAMP report addresses consumers’ expectations about housing markets, consumer choices and satisfaction levels, an outlook for residential mortgage lending, lender selection, fixed versus variable rate mortgages, the volume of mortgage business in Canada, forecasts of mortgage lending activity, and much more valuable information for home buyers, sellers and mortgage borrowers. More and more borrowers now use the services of professional mortgage planners, particularly CAAMP members who have earned Accredited Mortgage Professional (AMP) status, as opposed to dealing directly with banks, trust companies, credit unions, etc. Borrowers often get better deals by going to a professional mortgage planner who can source a variety of competing rates and terms. Use of the mortgage broker channel by the borrowing public is growing steadily.

The CAAMP report is clear: Canadians are optimistic, with 61% feeling that now is a good time to buy a home. Last year at this time, 38% felt that way.

The average residential mortgage rate is 4.55%. Last year at this time it was 5.41%.

There is anxiety over job loss; however, 80%of Canadian homeowners have more than 20% equity in their homes, which could provide support during a period of unemployment.

The average amount of equity Canadians holding a mortgage have in their homes is $142,000 which represents 52% of the value of the average home. Approximately 1/3rd of homeowners do not hold a mortgage (they own their homes clear title) and have an average of $322,000 equity in their homes. Overall, Canadian homeowners have 74% equity in their homes, considerably more than the equity stake U.S. homeowners have.

Fixed rate mortgages are preferred, with 68% of mortgage borrowers having fixed as opposed to variable and adjustable rate mortgages. Fixed rate mortgages are the most popular among borrowers between the ages of 18 and 34, while borrowers 55 years of age and older are more likely to prefer variable rate mortgages.

Canadian mortgage borrowers financed the equity in their homes for two primary reasons: renovations (30%) and debt consolidation (70%). Debt consolidation makes sense with mortgage rates being low compared to most non-mortgage consumer and credit card debt.

All in all the Canadian real estate and mortgage market appears to be relatively stable, with a reasonable balance between sellers and buyers, thus creating well-needed competition.