Mortgage Market Update / Mortgage Stats You Did Not Know / Homeownership / Mortgages / Canada

Hello it’s Mark Albert, thanks for being with me. Today we are going to look at the mortgage
market. We got a bit of an update. I read this long report, and of it I just
pulled a little bit of data for our consideration today. So Mortgage Professionals Canada released
it’s state of the mortgage market report. You know when the United States President,
when he does his state of the union address it’s a big deal down there. And for Mortgage Professionals Canada, when
they release their annual report, which is this, at the end of every year, it’s a big
deal for them. So there is a lot of good data and I just want to highlight some key things that I think you may like to see there. So we look at the stats on home ownership is
there is about 10 million homeowners or homes that are owned in Canada.
In fact the number is 9.8 million home owners. Of that number, some of them
have paid off their mortgage. And ideally you want to move towards
complete debt elimination. Being debt free. However there’s still 6 million Canadians, or Canadian homes, that have a mortgage still attached to their home. Of that number, 1.6 million of these have what they
call a HELOC. Which is a home equity line of credit. Which is basically a line of credit that’s
attached to the equity in your home. And it’s just interesting to know that. So
the strategy should be for there people, who own a home, is to pay down that debt
as soon as they can to become debt free. So of the people who have mortgages, the 6 million, 68% of them, they have what we call a fixed rate mortgage. So that could be a one year fixed, two year, three year, four year, five year fixed, could be ten year fixed. There just a fixed, the rate is fixed
for a period of time. And 27% have a variable or adjustable rate mortgage. So if we look at the fixed rate mortgage. In the last couple years or so we’ve been
in an interest rate increase market. So the market, the rates, have been increasing. The Bank of Canada keep doing interest rate announcement hikes. And so what happens is a lot of people, I know when I’m working with
people, either one or two of a couple, or both, or whoever’s on title, they just feel
‘I want to go with a fixed rate mortgage to give me peace of mind’ and I think that’s
why this number is a bit higher. Because prior to this last two years we’ve
gone through ten years where you would have been better off being in a variable rate mortgage. Now of this number, 5% they’ve got this hybrid
mortgage which part of it is fixed rate and part of it is variable rate mortgage
component. So it’s a hybrid. Not very common out there,
but about 5% of the mortgages. So when we look at amoritization we see that 89%
are in a mortgage that is amoritized 25 years or less. And 11% of the people they are in a mortgage
that is amoritized longer than that. So you can get a 30 year mortgage amoritization. I have a few lenders where I could get a 35 year amoritization. Now obviously people aren’t getting that to
pay down the mortgage quicker, but it may help them to qualify in light of the current
stress test, just to get in the market. When someone is in the market, they’re in for
several years, and then they’re in a different situation and maybe they can go down to
25 year amoritization mortgage. And then finally the average amoritization
period is about 22 years. So just information for us to know and sometimes
it’s good to know and understand these things and ask questions, ‘well why is that the case?’
Listen hopefully you find this helpful. Thanks so much for being with me. Have a
wonderful day, and we’ll talk to you another time soon.

Paul Whisler


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  2. Is your home paid off yet? Are you aggressively paying off your mortgages?

  3. Would you find it helpful to see this type of mortgage information updated for you annually?

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  5. Just wondering where are you getting you numbers from? Just because there are 36 million people in Canada, you are saying that out of that 36 only 10 million people have a mortgage? So does that mean that the other 26 million people rent or have a house that is paid off. Please let me know if I understand this correctly.

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