Wednesday, November 21, 2012

Interesting Mortgage Statistics

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.

Among borrowers who took out a new mortgage in 2012, a record 47% obtained it 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.

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%. Compare this to mortgage arrears in the United States which is consistently over 20% (100 times higher than Canada) over the past 4 years. Cannot compare the 2 banking systems...

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.

Source: Taylor Made Mortgages