Mortgage stats and you

Amortizations are falling, rate discounts are increasing and consumers have flocked to fixed rates. Those are a few of the trends found in the Canadian Association for Accredited Mortgage Broker’s (CAAMP)  Annual State of the Residential Mortgage Market report.

At the same time the Canadian Real Estate Association (CREA) has also revised its outlook to take into account a more buoyant market than expected. National sales activity has been stronger than anticipated. And Canada is staying the course with its prime rate at least until 2015.

CREA’s forecast for national sales activity has been rebalanced with a modest upward revision this year to reflect stronger than expected sales for the year-to-date. Sales are forecast to reach 449,900 units in 2013. In 2014, national activity is forecast to reach to 465,600 units, a rebound of 3.5 per cent, and in line with its 10-year-average. The forecast increase reflects a gradual strengthening of sales activity alongside further economic, job, and income growth combined with only slightly higher mortgage interest rates.

So where do you fit in? The following highlights of CAAMP’s report  were compiled by Canadian Mortgage Trends.

1. 16% of homes purchased in 2013 had amortizations over 25 years
2. 8% of respondents believe the housing bubble will burst within the next five years
3. 82% of new mortgages for homes purchased in 2013 were fixed rate mortgages
4. 2% of buyers with less than 20% down chose a variable rate mortgage 
5. 40% of new mortgages in 2013 were obtained from a mortgage broker.
6. 70% of households with mortgages have 25% or more equity
7. 57% of 2013 homebuyers were first-time buyers
8. 84% of mortgages on homes purchased in 2013 had an original amortization of 25 years or less
9. 16%  of borrowers  increased the amount of their payments in the past year – the average monthly increase was  $400 
10. 17% of borrowers  made a lump sum payment – the average amount was $14,000

Other highlights:

• 43% of current mortgage holders  consulted a mortgage broker about getting a new mortgage
• 68% of respondents agreed their mortgages are "good debt"

Interest Rates

•  3.23% is the average mortgage interest rate for mortgages on homes purchased in 2013
•  3.20% is the average mortgage interest rate for mortgages renewed in 2013, which averaged 0.82 percentage point lower than prior to their renewal

Equity Take-Out

• 11%  of homeowners took equity out of their home in the past year with $57,000 the average amount
• $59 billion is the estimated amount of total equity take-out in the past year
• $16.6 billion was used for debt consolidation and repayment
• $15.1 billion was used for investments
• $12.3 billion was used for home renovations

Real Estate/Mortgage Market

• 9.52 million: The number of homeowners in Canada
• 4.28 million: The number of renters in Canada
• 5.58 million: The number of homeowners with mortgages (who may also have a home equity line of credit (HELOC))
• 3.94 million: The number of homeowners who are mortgage-free
• 2.3 million: Number of total homeowners who have HELOCs

Mortgaging Activity

• 450,000 of households bought homes over the past year
• 400,000 of buyers took on mortgages