Canadian Residential Mortgage Borrowing Trends

NOTE: When reading these stats please be aware that they apply to 2008 and 2009. When a reference is made to the past (or last) year, the year is 2008. The current year for the referenced stats is 2009.

 

Broker/Lender Market Share

• 30% of new mortgages were arranged by mortgage brokers (up 1% from Spring-09)
• 50% of new mortgages were arranged directly through banks
• 20% of new mortgages were arranged through credit unions, trust companies, insurance companies and other non-bank lenders

Mortgage Activity

• 24% of homeowners took out new mortgages in 2009 
• 7% of new mortgages were for home purchases 
• 17% of new mortgages were for renewals, refinances or transfers 
• 11% of mortgage borrowers took equity out of their homes in 2009 

Mortgage Rate Type

• 65% of borrowers chose fixed rates in 2009 
• 29% chose variable rates 
• 45% of borrowers over age 55 took variable rates 

Mortgage Terms (Maturities)

• 1-year 6% 
• 2-year 7% 
• 3-year 12% 
• 4-year 9% 
• 5-year 44% 

Over 10 years 22% (surprising since there is little evidence that terms of this length are economical over the long term)

Mortgage Amortization

• 17% of mortgage borrowers have amortizations over the standard 25 years (same as 2008) 
• 36% of mortgages originated in 2009 have amortizations over 25 years (versus 46% in 2008) 

Mortgage Interest Rates

• borrowers got an average discount of 1.46% off posted 5-year fixed rates in 2008 
• the average Canadian mortgage rate is now 4.09% (down from 4.83% one year ago) 
• the rate on mortgages originated in the past 6 months is 3.63% 
• just 1.3% of mortgage borrowers have rates of 8% or more 

Payment Arrears

• 93% of Canadian mortgage borrowers have never missed a payment 
• 4% missed a payment in 2008 (no link, however, to new home buyers or to 30-40 year amortizations) 
• 6.8% of mortgage borrowers indicate that they presently have difficulties making their payments 
• 8.6% of mortgage borrowers expect that future potential rate increases may exceed their mortgage payment tolerance. Many of these borrowers may have breathing room, as many have large amounts of home equity to work with. 
• .45% of Canadian mortgage borrowers are 90+ days overdue on their mortgage payments (as of February-10)