Stability in the Canadian Mortgage Market

CAAMP (Canadian Association of Accredited Mortgage Professionals) conducted a survey this past April. The survey company polled 2,000 Canadians, including 800 mortgage holders. 

They titled their report:  Stability in the Canadian Mortgage Market, which is good news for consumers.  CAAMP's report starts out with:

The residential mortgage market is, of course, intricately dependent on trends in the housing market, as well as the broader Canadian economy. It, too, is in robust health.

The CAAMP Survey is filled with detailed charts and much speculation.  Click Here if you want to get the full survey. 

Here are a few of the more interesting tidbits from the CAAMP poll:

The Majority of Canadians expect rates to rise:

Sixty-one per cent of Canadians expect mortgage rates to increase in the next 12 months.  That's no big surprize, though the Bank of Canada is now hinting that they will not increase the overnight rate until September. Earlier reports strongly indicated a July increase ... oh how quickly things change!!

Profile of Mortgage Holders:

There are currently about 9.45 million home owners in Canada, of whom about 5.7 million have mortgages. An estimated 3.75 million home owners are mortgage-free, although they may have other forms of debt.

The average outstanding principal is $150,000.

Mortgage Amortization Periods:

During recent years, mortgages with longer mortgage amortization periods have become increasingly prevalent. 

For mortgages on homes purchased during 2010 and 2011, 59% have amortization periods of 25 years or less and 41% have extended amortization periods.

Rising Interest Rates Will Bring Challenges:

Low interest rates in Canada have strongly stimulated housing activity, and consequently resulted in rapid growth of mortgage indebtedness.

It is very reasonable to ask - as many have - if consumers will be able to afford their mortgage payments when interest rates inevitably rise.

So I'm asking:  Are YOU prepared for the forecasted increase in mortgages rates?

According to CAAMP --

CELEBRATION!