Mortgage Industry in the Media – Part 1
In recent weeks, there have been numerous articles in the national media on the state of the Canadian mortgage industry. Some of the issues regard the impact of longer amortizations and a perceived failure to anticipate the effects of various mortgage products. Others are misconceptions due to all the information coming from the US. The situation in Canada is quite different.
Here is part one of some information compiled from CAAMP’s Annual State of the Residential Mortgage Market in Canada, by CAAMP Chief Economist Will Dunning. To view the full report click here (PDF file).
Relatively few outstanding mortgages in Canada have 40 year amortization periods – only six percent or just over 300,000 mortgage holders out of 5.25 million;
Mortgagors with a variable rate product know their rate and most have the option to convert to a fixed rate product. In the past year, 40% of mortgage holders took out a variable rate mortgage with the expectation that declining rates will continue to drop. This is in stark contrast to the U.S. where the resetting of option ARM mortgages means millions of mortgage holders have been and will continue to face higher rates;
It’s a fact that the economy is slowing; however if borrowers find themselves with financial difficulties, it will most likely be a result of their employment situation rather than their mortgage product;
…. continued.
