Survey Results from the Canadian Association of Accredited Mortgage Professionals

As Canadians weather the harsh economy, a beacon of their strength is the considerable amount of equity they have in their properties, according to a report released today by the Canadian Association of Accredited Mortgage Professionals (CAAMP).

New challenges, such as budgeting for mortgage payments, are emerging, yet housing affordability has dramatically improved due to lower interest rates and price reductions.

The report is authored by CAAMP Chief Economist Will Dunning and based on information gathered by Maritz Research in an online survey conducted in March 2009. Over 40 per cent of all mortgage holders have at least 50 per cent of the value of their homes in equity, and of all Canadian home owners, which includes those without mortgages, 65 per cent hold at least half the value of their properties. Only two per cent of mortgage holders have negative home equity, meaning the value of the mortgage exceeds the value of the home.

The Majority of Canadian home owners hold more than 50 per cent equity in their homes ensuring a healthy mortgage market.

“CAAMP’s report demonstrates that home owners have solid equity positions and although facing financial uncertainties, most Canadians have the ability to deal with temporary market fluctuations and reductions in personal income,” said Jim Murphy, AMP, President and CEO of CAAMP. “With only a very small number at risk of not being able to pay or refinance their mortgages, our overall market is very strong.”

There is no doubt that the current economic backdrop means increased financial challenges for Canadians. Job loss is a major risk factor for home owners and 18 per cent of those surveyed indicated an individual in their household had lost a job in the past six months. The economy looms large when people consider buying a home.

Despite the fact that 55 per cent say now is a good time to buy, up almost 20 percentage points from fall 2008, only four per cent of homeowners and six per cent of non-owners actually say they anticipate buying – about the same number as last fall. Low and flexible interest rates plus longer terms are adding buoyancy to the mortgage market. Mortgage holders are extremely successful negotiating their interest rates, knocking off an average of 1.68 per cent from the posted rate. Three-quarters of those who renewed their mortgage in the past year had their interest rate reduced.

On average, renewals resulted in interest rate reductions of almost one full per cent. Three-quarters of Canadian borrowers are also likely to see reductions in their interest rates at their next renewal. “While many Canadians are experiencing mortgage-related challenges, these issues are much less significant than the problems in the American market,” said Will Dunning.

“The Canadian Residential Mortgage Market During Challenging Times” report contains a wealth of industry data, including consumers’ expectations of the housing market, profiles of mortgage holders, regional breakdowns of survey responses, and additional insight into challenges for mortgage holders in Canada.

View  Significant Statistics from the CAAMP Spring Survey

Download the Canadian Residential Mortgage Survey Report

Are you in a position to invest in rental real estate? The time has never been better with lower prices and exceptionally low interest rates.