15 Boring Mortgage Facts You Probably Don't Care About

Mortgages are so boring...it's painful.

And only people like Mortgage Professionals can find any excitement in Mortgage Facts - granted, most other people don't.

But, we do like to share.  So please - get yourself a cup of coffee, put your feet up, and check out our 15 Mortgage Facts!

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15 Mortgage Facts for Canadians as of December 31st, 2016

1.     Canada is the 4th Priciest Country to buy a home in. 

a.     Iceland (1)

b.     Hong Kong (2)

c.      New Zealand (3)

d.     Canada (4)

e.     Turkey (5)

f.      China (10)

g.     Australia (20)

h.     US (29)

i.       UK (35)

2.     Canadians, on average, pay their mortgages off between 5 and 7 years earlier than the standard amortization level of 25 years.

3.     Canadians don’t like risk…more than 65% of Mortgage in Canada are Fixed – in 2016 the number was 84% for all new mortgages and 74% for ALL Mortgages (including refinances) – 26% have Adjustable/Variable Rate Mortgages – and 6% have a Matrix mortgage combined with a Fixed portion and an Adjustable portion.

4.     At the end of 2016, the balance of outstanding Canadian Mortgages was $1.45 TRILLION, which translates to just shy of 25% of total Residential Value in the Market Value for all Canadian Residential homes, which is currently hovering around $6 Trillion.  The average Purchase Price in Canada at the end of 2016 was $375,000.00 (of $259 Billion transacted annually)

5.     There are currently 9.86 MILLION homeowners in Canada…58.6% or 5.78 Million, of these homeowners carry either a mortgage or a Home Equity Line of Credit – the other 41.4% of homeowners are Mortgage Free.

6.     The average Mortgage Payment in Canada is now $1508.00 per month

7.     Canadians who exercise prepayment privileges has fallen from 87% (Pre 1990’s) to 62% at the end of 2016, which is actually up from 58% in 2013.

8.     Less than 1 in 360 Borrowers is considered to be in arrears. 

a.     Most defaults are due to reduced ability to pay stemming from

             i.     Job Loss

             ii.     Income Reduction

             iii.     Marital Breakdown

b.     Defaults can also be caused by unaffordable rises in Mortgage Costs

             i.     Increased Mortgage Rate (when considering Adjustable/Variable Rate Mortgages)

             ii.     Higher Rate Renewals

c.      In addition, Defaults can occur due to rising household costs

             i.     Increased Utilities

             ii.     Increased Property Tax

             iii.     Increased Family Member Expenses (Hockey!!)

9.  The average 5 year posted rate between Retail Banks, the Big 5, Trusts and Credit Unions was 4.66%

10. The averaged 5 year posted rate provided by Mortgage Brokers was 2.79%

11. In 2015, 85% of homeowners had equity greater than 25% in their homes – this number jumped to 89% in 2016.

12. Less than 1% of Homeowners were experiencing Negative Equity in 2016

13. Uses for Equity Mortgages included:

a.     Debt Consolidation

b.     Home Improvement

c.      Equity Takeout

              i.     For Vehicle Purchase

              ii.     For Education Expense

              iii.     For Investment

14. New Homebuyers are more educated now than ever.  63% of new home buyers possess above average awareness regarding Mortgage Insurance Criteria

15. Resale Trends in Saskatchewan continues to show the consequences of the plunge in the price of oil.  The trend might be stabilizing, at almost 20% below the prior peak.  However, the changed mortgage insurance rules are likely to result in a further down leg.  Resale pricing in Saskatchewan has been roughly flat for the last 2 years.  The same is true for Alberta.

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Sources:  MPC 2016 Annual State of the Residential Mortgage Market in Canada; 2017 Q1 Global House Price Index