Homeowners managing mortgage debt, says report

by Nestor Arellano18 Nov 2012

“Our most recent survey demonstrates once again that the vast majority of Canadian mortgage holders, whether they are first time buyers or long time homeowners, are acting responsibly, when it comes to reducing their mortgage indebtedness,” said Jim Murphy, president and CEO of the Canadian Association of Accredited Mortgage Professionals.

Data released by the association in its Annual State of the Residential Mortgage Market in Canada report indicate that one-third of borrowers made additional payments or accelerated payments to their mortgages, 87 per cent of homeowners have at least 25 per cent equity on their homes, and 61 per cent of consumers who renewed their mortgage in the past year saw a reduction in their interest rates.

Furthermore, the survey found, that regardless of the amortization period initially chosen by homebuyers, their actual repayments were generally completed within two-thirds of the contracted period.

Early this summer, Finance Minister Jim Flaherty introduced a series of lending rule changes aimed at restricting access to mortgages in an effort to avert a debt crisis. The move shut off a huge number of first-time and BFS home buyers from the market and was not well-received by the mortgage industry with many brokers arguing that overheated markets such as those in Toronto and Vancouver were already headed towards a correction.

In its report, CAAMP has identified weaknesses in the mortgage market that could undermine the economy’s recovery.

“Our concern today is the number of growing first-time buyers who are now unable to get a mortgage,” Murphy said in a press release. “We worry that this is having a dampening effect on what was already a cooling market and we hope policymakers will give some thought to addressing the needs of this key sector.”

CAAMP also warned the slowdown could impact job creation in the country.

“Since the government tightened mortgage accessibility for the fourth time this past July, we’ve seen a drop in sales activity that I think foreshadows an overall decline in the housing market,” said Will Dunning, chief economist for CAAMP. “My concern is that the policy-induced housing market downturn creates unnecessary risk that directly affects not just housing but job creation and the economy as a whole.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Get help choosing the best mortgage rate

Just fill in a few details, and we'll arrange for a Mortgage adviser to help you find the best mortgage for your needs

  • How soon do you want a mortgage?
  • Name
  • Where do you live?
  • Phone number
  • E-mail address

Industry news

Submit a press release


Do you invest in commercial properties?