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Press Release |
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Housing and Mortgage Market Trends in Canada (May 2008) 81 per cent of Canadians satisfied with their mortgages (April 16, 2007) 80% of Canadian mortgage holders could handle small mortgage rate increase thanks Strong Canadian Mortgage Market Depends Less on Sub Prime Products than U.S. (March 15, 2007) Further 10% growth expected for Canadian mortgage credit in 2007 (November 8, 2006) Survey Backgrounder (November 8, 2006) 81 per cent of Canadians satisfied with their mortgages Canadian Association of Accredited Mortgage Professionals survey shows longer amortization and flexible terms keep mortgage industry buoyant November 7, 2007 (Toronto, ON) – The vast majority of Canadians (81 per cent) are happy with the terms of their mortgages thanks in large measure to “good interest rates” and longer amortization options, according to a report released today by the Canadian Association of Accredited Mortgage Professionals (CAAMP). Significantly, thirty seven per cent of Canadians who have taken out a mortgage in the last year have chosen amortization periods of more than 25 years. The information was gathered by Maritz from an online survey of 2,000 Canadians in late September and analyzed in conjunction with CAAMP economist, Will Dunning. While mortgage rates continue to be the most common factor consumers use to rate satisfaction with their mortgages, consumers are clearly pleased with the many new alternatives they have. Fifty-eight per cent cited more choice for payment options and mortgage terms as reasons for being satisfied with their current mortgage. “Canadians, particularly first time homeowners, are looking for lending products that can help them enter the market as prices continue to rise,” said Jim Murphy, AMP, President and CEO of CAAMP. “Alternative lending products, such as longer amortizations, with the option to renegotiate terms, are keeping the housing market accessible to a wider range of investors.” Most Canadians chose their mortgage lender because of the rate offered and most said they sought two or less quotes, suggesting that at least on rates, there is not much difference among institutions. The number of Canadians who have consulted with a mortgage broker remained unchanged from last year at 28 per cent; however for those new mortgages taken out during the last year, the number consulting mortgage brokers rises to 43 per cent. The majority of Canadian mortgage holders continued to consult with one of the major banks when taking out a mortgage. The survey asked Canadians about the turmoil in the United State’s sub-prime mortgage and housing markets. Most Canadians said they are aware of the events, and that they are concerned about them to varying degrees. However, they see little impact on themselves – even among those who are concerned to some degree, 58 per cent said that the changes in the U.S. have had no effect on their recent decisions. “Canadian homebuyers are a sophisticated and savvy group,” said Andrew Moor, AMP, CAAMP Chairman. “They have a risk management attitude. Canadians understand that our mortgage market remains strong and stable, even as they continue to keep a close eye on interest rates.” Growth of residential mortgage credit continues to accelerate – during the past two years, it expanded by an average of $77 billion per year, or 11.4 per cent per year. The volume of residential mortgage credit outstanding is forecast to grow by 11.7 per cent in 2007, 9.3 per cent in 2008 and 8.4 per cent in 2009. Total mortgage credit is projected to reach $963 billion by the end of 2009 and will surpass $1 trillion during 2010. The mortgage market’s expansion in recent years is related to strong housing market activity. The volume of sales more than doubled (rising by 144 per cent) in the six years from 2000 to 2006, for a growth rate of 16 per cent per year – resulting in a rapidly rising requirement for mortgage financing. Over the same period, outstanding residential mortgage credit expanded at a rate of 8.9 per cent per year. Canadian attitudes towards buying a home varied according to their locations. Those most negative pointed to high house prices. Those most positive cited low interest rates. When asked if “now is a good or bad time to buy a home in your community,” British Columbians were slightly less positive about buying than a year ago while Saskatchewan and Alberta were the only two provinces where a majority gave a negative response (60 and 59 per cent respectively) reflecting the heated housing markets in those two provinces. In the East, Quebec and Ontario, respondents were more positive about buying at this time. For a pdf version of the press release, click here 80% of Canadian mortgage holders could handle small mortgage rate increase thanks to healthy economy Canadian Association of Accredited Mortgage Professionals releases bi-annual report on mortgage choices and perceptions in a changing market April 16, 2007 (Toronto, ON) – The Canadian mortgage market continues to grow, helped by low mortgage rates that make home ownership possible, even as housing prices rise, according to a report released today by the Canadian Association of Accredited Mortgage Professionals (CAAMP). The report, authored by CAAMP’s Chief Economist Will Dunning, was based on information gathered by Maritz Research in a phone survey in February. The report indicates that even if interest rates increased by as much as one-half point, 80 per cent of Canadians could tolerate the increase to their mortgage payments. “Canada is economically strong and Canadians are financially fit and the mortgage market reflects this,” said Jim Murphy, President and CEO of the Canadian Association of Accredited Mortgage Professionals. “Our recent survey shows that mortgage holders continue to be satisfied with their current rates and could absorb a further 0.5 per cent increase, without it having a “significant impact” on their standard of living.” At a time when the U.S. mortgage market has been shaken by defaults in the sub prime sector, CAAMP asked Canadians how aware they were of alternative products such as interest-only mortgages, longer amortization periods and no down payment mortgages. About half of consumers, 51 per cent, said they were aware. Thirty-six per cent responded positively to the alternatives, 27 per cent were negative and 31 per cent expressed a neutral view. Younger Canadians who did not own homes were most interested in these alternatives. On the whole, the CAAMP survey shows a strong and growing Canadian mortgage market, and unlike the Americans, Canadians remain confident and optimistic about the future of this market. “Overall, this survey confirms that most Canadian home owners are very risk averse when it comes to their mortgage,” said Paul Grewal, AMP, Chairman of CAAMP. “Mortgage rates continue to hold at historic low levels and an increasing number of consumers choose the conservative path of fixed rates.” Seventy-three per cent opted for a fixed term compared to 67 per cent a year ago. Variable rate mortgages account for 21 per cent of the total mortgage market and combination mortgages for only 6 per cent (down from 11 per cent a year ago). Responding to recent increases in mortgage rates, only 16 per cent of Canadians noted a positive impact, whereas 26 per cent noted a negative impact on their overall standard of living. Yet, the average rating (10-point scale, where “1” means very negative and “10” very positive) increased to 5.00 from 4.88 a year earlier. With regards to mortgage renewal activity in Canada, almost one quarter of respondents (23 per cent) have yet to decide on the type of mortgage renewal, although 44 per cent of surveyed mortgage holders who expect to renew their mortgages in the coming half of 2007 will choose a five-year term. And further indication of the health of the Canadian economy is supported by the fact that of the 4.9 million home owners in this country, almost 300,000 will not renew their mortgages (mortgages will have been paid off). Average house prices rose by about 10 per cent in both 2004 and 2005 and a further 11 per cent in 2006. Canadians remain optimistic about housing markets. For all of Canada, only 9 per cent of consumers surveyed expressed negative opinions about the prospects for house prices in their community. When asked “Is now a good time or a bad time to buy a new home in your community?” the most positive responses were given in Atlantic Canada and Ontario. The most significant jump in positive responses was seen in British Columbia, where it moved from below national average in the fall 2005 to almost in line with the average this fall. Alberta had the most negative outlook, where many consumers considered their local housing markets over-heated. The survey, “Consumer Mortgage Choices in a Changing Market”, contains a wealth of additional industry data including consumer response to new mortgage options, the age distribution of mortgage holders in Canada, popularity and rates of different mortgage terms, and anticipated mortgage renewals. For a full copy of the survey, please visit: caamp.org For a pdf version of the press release, click here
Strong Canadian Mortgage Market Depends Less on Sub Prime Products than U.S. March 15, 2007 (Toronto ON) — Canada’s mortgage market is a picture of health, in contrast to concerns in the United States generated by the weakening sub prime mortgage market, the Canadian Association of Accredited Mortgage Professionals (CAAMP), said today in a statement. Canada is helped by the fact that:
While new mortgage lenders and products have been introduced in Canada over the last few years, to provide borrowers more options in a rising cost environment, the Canadian mortgage market is different from that of the US. The vast majority of mortgages are amortized over 25 years or less with nearly two thirds of mortgages set at fixed rates with the five year period being the most common. “The Canadian mortgage market also differs from the US in other ways - we have not seen the aggressive lending practices common south of the border” stated Canadian Association of Accredited Mortgage Professionals (CAAMP), Chairman Paul Grewal, AMP. Added Jim Murphy, CAAMP’s President & CEO, “It is important to note the continued strength and stability of the mortgage and housing markets in Canada.” For a pdf version of the press release, click here
Canadian Association of Accredited Mortgage Professionals appoints Jim Murphy as president and chief executive officer March 5, 2007 (Toronto, ON) — The Board of Directors of the Canadian Association of Accredited Mortgage Professionals (CAAMP) today announced Jim Murphy has been selected to be the industry group’s president and chief executive officer. The position was recently restructured to enable the organization to identify a leader who could work fulltime with enthusiasm and a passion for excellence in the promotion of CAAMP. Formerly known as the Canadian Institute of Mortgage Brokers and Lenders (CIMBL), the name change to CAAMP represents the transition from a trade association to a professional association and reflects the association’s commitment to raising professional standards in the mortgage industry. Murphy joined CAAMP in 2005 to lead the Government Relations and Communications department and in this position was responsible for all government relations activities and media and public relations projects. Prior to joining CAAMP, he enjoyed a distinguished career in both the private and public sectors. “As the organization, formerly known as CIMBL, moves towards CAAMP, we created the new position of president and CEO to ensure our fast growing industry has a leader at the helm who will champion the importance of the AMP designation to existing members, new members and to the broader community including mortgage-seeking customers,” said Paul Grewal, AMP, Chairman of the Canadian Association of Accredited Mortgage Professionals. “Having worked with Jim for two years, I can say with confidence that he will ensure that the voice of CAAMP will be heard and respected among consumers and the increasingly expanding mortgage industry.” For a pdf version of the press release, click here
Further 10% growth expected for Canadian mortgage credit in 2007 Canadian Institute of Mortgage Brokers and Lenders releases second annual report on Canada’s November 8, 2006 (Toronto, ON) – Canadians have every intention of keeping up the feverish pace of mortgage borrowing, adding an expected $78 billion by the end of 2007 to produce a total mortgage credit valued at $808 billion, according to a report released today by the Canadian Institute of Mortgage Brokers and Lenders (CIMBL). The information was gathered by Pollara in a phone survey in late September and analyzed in conjunction with Canadian housing analyst and CIMBL economist, Will Dunning. Underpinning this growth in credit is the fact that 88 per cent of Canadians are satisfied with the terms of their mortgages, despite interest rate increases over the last year, as determined by CIMBL’s fall 2006 survey. Also supporting a projected 10 per cent growth in mortgage credit are rising house prices, a booming economy in western Canada and continued high numbers of new housing completions. “The Canadian mortgage market remains exceedingly robust,” said Paul Grewal, Chairman of the Canadian Institute of Mortgage Brokers and Lenders. “The housing market remains very active overall in historic terms, setting new record levels of dollar volume sales. In addition, new lenders and mortgage insurers have entered the market increasing Canadians’ options for mortgage products,” Grewal added. “This will continue to fuel the mortgage market.” The mortgage credit market is a big component of the Canadian economy. Outstanding Canadian mortgage credit was valued at $687 billion, mid-2006 (compared to $617 billion, mid-2005). Canadian mortgage credit is expected to grow by 10.8 per cent in 2006 for a year end total of $730 billion. Further growth of 10.5 per cent is forecasted for 2007 for a Canadian mortgage credit of $808 billion by year end. Approval activity in 2006 will be approximately $197.6 billion (8.5 per cent higher than in 2005). For 2007, approvals are forecasted to exceed $200 billion for the first time at $204.5 billion (3.5 per cent higher than in 2006). “Competition is certainly a feature that shines through in this survey,” said Grewal. “More Canadians are consulting with mortgage brokers (31 per cent in 2006 vs. 25 per cent in 2005) whether they are taking out a new mortgage, or renewing or refinancing an existing mortgage. The average rate for current mortgage holders is 5.05 per cent – well below posted rates for the major lenders – which suggests that comparison shopping is working to their advantage.” Residential mortgage lending in Canada is provided by a wide range of institutions. According to the September survey, chartered banks account for approximately three-fifths (59 per cent) of the outstanding residential mortgage credit. The data collected shows that NHA Mortgage Backed Securities have gained 2.0 per cent of the market in the same period. Ontario accounted for nearly half the residential mortgage approvals in 2005, with 45 per cent of the market. British Columbia, Alberta and Quebec each accounted for more than 10 per cent of the nation’s mortgage activity. When asked if “now is a good or bad time to buy a home in your community”, Alberta and British Columbia were the only two provinces which said most definitely ‘no’ - Alberta: 70 per cent negative vs. 12 per cent positive; B.C.: 45 per cent negative vs. 25 per cent positive. The survey findings show that Canadians as a whole are exceptionally happy (or “comfortable”) with the current state of the housing market and their residential mortgages. For a pdf version of the press release, click here
Survey Backgrounder Methodology In late September and early October 2006, POLLARA conducted a telephone survey with 1,717 Canadians, including homeowners and renters. A sample of 1,717 Canadians ensures an accuracy of + 2.3%, 19 times out of 20. Survey Highlights and Key Findings Mortgage Satisfaction
Average Canadian Mortgage Rates
Negotiating a Mortgage
Characteristics of the Canadian Residential Mortgage Market
Consumer’s Expectations of the Canadian Housing Market
For a pdf version of the press release, click here
42% of Canadian mortgage holders still happy with their rates despite recent increases Canadian Institute of Mortgage Brokers and Lenders releases report on mortgage choices and perceptions in a changing market March 28, 2006 (Toronto, ON) – A majority of Canadians believe their current mortgage interest rates are manageable, despite recent hikes, according to a report released today by the Canadian Institute for Mortgage Brokers and Lenders (CIMBL). The information, gathered by Pollara in a phone survey in February and analyzed in conjunction with Canadian housing analyst and CIMBL economist Will Dunning, indicates that 42 per cent of Canadian residential mortgage holders polled have not seen their overall standard of living significantly affected by the recent mortgage rate increases. “As the spring home buying season begins, interest rates remain at a historic low and mortgage holders continue to be satisfied with their rates,” said Ron Swift, President of the Canadian Institute for Mortgage Brokers and Lenders. “Our latest survey reveals that Canadians find their current mortgage rates manageable, despite increases over the past eight months. In addition, although mortgage holders anticipate further rises, the study suggests that a majority will be able to tolerate an increase of up to 1 percent. That’s great news for the marketplace.” For the mortgages currently held by Canadians, the average mortgage interest rate is 4.9 per cent. Consumers are in tune with what the Bank of Canada and economist are forecasting – 66 per cent of consumers say they expect mortgage rate increases in the near future. CIMBL’s research shows that current mortgage holders have a surprisingly high tolerance for potential interest rate increases. The study suggests that if rates remain at current levels, 62 per cent of Canadians would face increased interest rates at their next renewal. Yet, only 21 per cent of mortgage holders would see a significant impact on their standard of living for a monthly mortgage rate increase of $100; 53 per cent would see an impact with an increase of $200. Sequentially, a further increase of one-half of a percent would negatively impact 20 per cent of Canadian mortgage holder’s overall standard of living. An increase of one-half of a percent from current rates would result in an average monthly increase of $50 in interest ($72 up from $22). Total interest costs for Canadian mortgage holders would jump by more than $2.7 billion ($3.9 billion up from $1.2 billion). An increase of one percentage point from current rates would negatively impact the overall standard of living of 29 per cent of mortgage holders polled. Such an increase in rates would cause an average monthly interest payment increase of $123, bringing the total interest costs for Canadian mortgage holders to $6.7 billion, up $5.5 billion from current costs. In anticipation of a rise in interest rates, consumers are more likely to renew their mortgages early to lock into current rates. For the 15 per cent of consumers scheduled to renew their mortgages in the next twelve months, relatively small increases are expected – an average of $6 per month. For those renewing during the next one to six years, average costs will rise and peak in about four years. “As always, there is uncertainty about future changes in interest rates.” Swift added. “CIMBL’s report demonstrates that although mortgage rates are on the rise, Canadians continue to borrow – whether they are taking out a new mortgage, renewing or refinancing an existing one. There is still a strong real estate demand in Canada.” The survey, “Consumer Mortgage Choices in a Changing Market”, contains a wealth of additional industry data including the age distribution of mortgage holders in Canada, popularity and rates of different mortgage types and mortgage terms, and the amount of remaining principal on existing mortgages. For a full copy of the survey, please visit: www.cimbl.ca. For a pdf version of the press release, click here
About CAAMP Established in 1994, the Canadian Association of Accredited Mortgage Professionals (CAAMP), formerly the Canadian Institute of Mortgage Brokers and Lenders, is Canada’s national mortgage industry association. CAAMP has assumed a leadership role in the industry it serves and has set the standard for best practices for Canada’s mortgage practitioners. In 2004, CAAMP created the Accredited Mortgage Professional (AMP) designation as part of an ongoing commitment to increasing the level of professionalism in Canada’s mortgage industry. As a membership-based organization, CAAMP strives to develop its network of professionals and to represent the interests of these individuals to government, media and consumers. CAAMP has attracted over 11,000 members and 1,100 companies from across Canada – representing over 90% of Canada’s mortgage activity. CAAMP members make up the largest and most respected network of mortgage professionals in the country. CAAMP's membership base consists of mortgage lenders, brokers, insurers and other industry participants. CAAMP’s other primary role is that of consumer advocate. On an ongoing basis CAAMP aims to educate and inform the public about the mortgage industry. Through its extensive membership database, CAAMP provides consumers with access to a cross-country network of the industry’s most respected and ethical professionals. In September/October 2007, Maritz Research conducted a 21-question telephone survey with 2,000 Canadian consumers. A sample of 2,000 Canadians ensures an accuracy of + 2.2%, 19 times out of 20. A copy of the survey is available at www.caamp.org For more information or to request an interview, please contact: Myra Reisler Jim Murphy
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