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December 27, 2016

BC Housing and Mortgage Activity During 2016

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If you are like me, then you are going to enjoy quickly reading the state of mortgage industry in Canada.  In the Annual State of the Residential Mortgage Market in Canada they combined various data from the consumer survey and  estimated that:

  • By year-end, about 690,000 households will live in homes that they purchased during the year

(newly-constructed or resale). The average price is $376,000, for a total value of $259 billion.

  • Of these, about 75,000 did not take out any financing. Out of the 615,000 who took out

financing (a mortgage and/or HELOC), 510,000 took out a mortgage only, 25,000 took a

HELOC only, and 80,000 took out both a mortgage and a HELOC.

  • The total amount of financing (mortgages plus HELOCs) for these recent buyers is $172


  • The average loan to value ratio (including mortgages and HELOCs) of these recent purchasers

is 66%.

  • Among these recent homebuyers, 35% (about 240,000) also sold their existing home. Twothirds

of these traded-up (purchasing a home that cost more than the home they sold) and

one-third traded-down. Among these 240,000 homebuyers, the average change was an

increase of $66,000 (14%).

  • Out of the 240,000 homebuyers who also sold a home, about 64% had a mortgage on the

previous home, with an estimated total principal of $28 billion, which would have been

discharged or transferred at the time.

  • The combination of $172 billion in financing on purchased homes minus $28 billion on prior

dwellings means that home purchases in 2016 have resulted in a net credit growth of $144


  • Based on the survey data, 210,000 Canadian homeowners fully repaid their mortgages during
  1. The combined total of their original mortgage amounts is estimated at $37 billion.
  • About 950,000 homeowners will renew or refinance their mortgages during 2016. The

remaining principal for these mortgages averages $199,000, for a combined total principal of

$189 billion. About 330,000 of the borrowers who will have renewed their mortgages in 2016

also have HELOCs (although of these about 130,000 have a nil balance owing on the HELOC).

Among the 200,000 who owe money on a HELOC, the average owed is $95,000, for a

combined total of $19 billion.


Other findings on mortgaging activity include:

  • The fall 2016 survey estimates that 860,000 homeowners (9% of all homeowners) took equity

out of their homes during the past year, adding about $30 billion to their home mortgages

and $11 billion to their HELOCs, for a combined amount of $41 billion.

  • Based on the various information provided by consumers, it is estimated that regular

mortgage payments average $1,508 per month. For the 5.78 million mortgage holders in

Canada, this amounts to total payments of just under $105 billion per year. This includes $30

billion for interest payments and $74 billion in paydown of mortgage principals. As such,

across all mortgage holders, out of total regular mortgage payments, just 29% is for interest

and 71% is for principal repayment.

  • In addition, it is estimated later in this section that about one million current mortgage

holders made lump sum payments in the past year, totaling $17 billion.

  • Furthermore, among the 210,000 Canadians who have (or are expected to) repaid their

mortgages during 2016, lump sum payments total about $5 billion.

  • About 925,000 mortgage holders voluntarily increased their regular payments during the past

year, by amounts that equate to $4.1 billion per year.


The reader is cautioned that these estimates are based on a sample survey and, as such, are

subject to variation.

If you have any questions about a future or an existing mortgage, please don’t hesitate to call, I would love to chat.

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