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
billion.
- 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
billion.
- Based on the survey data, 210,000 Canadian homeowners fully repaid their mortgages during
- 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.
