The Canadian Association of Accredited Mortgage Professionals (CAAMP) releases annual fall survey report on residential mortgage market
Report identifies new risks in the Canadian mortgage market: CAAMP
Toronto, ON (November 19, 2012) –
* Among all mortgage holders, 65% have fixed rate mortgages, 28% have variable rate mortgages and 7% have a combination. For mortgages in 2012, there has been a significant shift to fixed rate mortgages - 79% are fixed, 10% are variable and 11% are a combination of both.
* 68% of mortgages obtained during 2012 have amortization periods of 25 years or less.
* 32% of mortgage holders are making significant efforts to accelerate repayments, including taking one or more of the following actions in the past year: 16% have voluntarily increased their monthly payments. 15% have made a lump sum contribution to their mortgage. 6% have increased their payment frequency.
* For mortgages that have been repaid since the 1990s, actual repayment periods have generally been only two- thirds of the contracted periods.
* Among borrowers who took out a new mortgage in 2012, a record 47% obtained it from a mortgage broker.
* For all current mortgages, 58% were obtained from a bank and 25% from a mortgage broker.
* The average mortgage interest rate is 3.55%, which is lower than last year's average of 3.92%.
* There has been a considerable amount of locking-in (converting from variable rate to fixed rate). Among the 3.85 million Canadian homeowners with fixed rate mortgages, 13% locked in during the past 12 months.
* Among mortgage borrowers who have renewed a mortgage this year, 61% experienced a reduction in their interest rate. * The average actual rate for 5-year fixed rate mortgages is 1.85 percentage points lower than typical (posted) rates in 2012.
* The volume of outstanding residential mortgage credit is growing at a slower rate than prior to the recession. The growth rate is forecast at 6.9% for 2012, followed by 5.5% in 2013 and 4% in 2014. * Of the 9.7 million homeowners in Canada, 5.95 million have mortgages and 3.75 million are mortgage-free.
* The arrears rate has fallen for 19 consecutive months and is approaching a record low of 0.25%.
* 87% of Canadian homeowners have 25% or more home equity. * According to simulations, 17% of high ratio mortgages funded in 2010 could not have been funded today, including 11% of prospective high ratio homebuyers who can't qualify for a mortgage under the new 25 year amortization rule.
* Since the most recent round of mortgage tightening came into effect there has been a drop in Canadian housing resale activity: between August and October, sales were 8% lower than in the year prior to the announcement.
The report, Annual State of the Residential Mortgage Market in Canada, is a semi-annual review of the Canadian mortgage market authored by Dunning. The report is based on information gathered by Maritz Research Canada in a survey of more than 2,000 Canadian consumers in October 2012.
For a full copy of CAAMP’s spring survey report, visit www.caamp.org
About CAAMP
CAAMP is the national organization representing Canada’s mortgage industry. With over 12,250 mortgage professionals representing over 1,700 companies, its membership is drawn from every province and from all industry sectors. CAAMP is the leading provider of service and advocacy for its members and sets the standard for the Canadian mortgage industry. In 2004, CAAMP established the Accredited Mortgage Professional (AMP) designation to enhance educational and ethical standards for Canada's mortgage professionals.
CAAMP’s other primary role is that of consumer advocate. On an ongoing basis CAAMP aims to educate and inform the public about the mortgage industry. Through its extensive membership database, CAAMP provides consumers with access to a cross-country network of the industry’s most respected and ethical professionals.
For more information, please contact:
Jim Murphy, AMP President and CEO, CAAMP O: 416-644-5465 / C: 416-940-0011 jmurphy@caamp.org
Jeri Brown, Media Profile O: 416-504-8464 Jeri.brown@mediaprofile.com
