The appetite for homeownership in Canada has been strong to start the year thanks in large part to low interest rates, according to nesto, an online mortgage brokerage.

A report from the firm showed that 60% of the brokerage’s users intended to purchase a new home last month, increasing from 48% in January 2020, but it’s come at the expense of refinances, which had declined by 5% since November.

“Just like every year, the first week of January was full of refinance applications resulting from many Canadians reviewing their household budgets,” said nesto’s report. “We expected refinance volumes to increase throughout the month, but to our surprise it was overshadowed by new purchase requests.

“As for overall demand, we recognized a large volume increase through Q4 that is snowballing into Q1. The demand has resulted in nesto adjusting staffing priorities in order to facilitate what we predict to be another very active and busy year in the real estate and mortgage space.”

Mortgage rates are steadily declining below what they were in 2020, which nesto, noting that its best insurable variable rate declined by 1.6% to 1.3%, attributed to robust home purchase demand. In Canada’s two most populous provinces, Ontario and Quebec, 65-70% of nesto’s application requests for new properties are from homebuyers who have just begun their searches, rather than from buyers who have already found their desired properties.

Moreover, the median amount for projected property value declined from $449,000 in October to $440,000 a month later, and down payments decreased from $62,000 to $50,000. The median down payment declined to around 10% last month from 13% in January 2020.

In Ontario, the median purchase price dropped by $50,000 to $540,000 in January from two months prior, while the median down payment fell by $30,000, and the down payment percentage hovered around 20%. In Quebec, the down payment percentage remained at 10%.

The report also says that Canadian parents are playing pivotal roles helping their adult children enter the housing market.

“A trend we recognize through our user engagement that is more prominent in Ontario vs. Quebec, is that many young home buyers in Ontario are starting off with a substantial gift from the bank of mom and dad,” said the report.