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Annual State of the Canadian Mortgage Market Report: 2019

The Annual State of the Mortgage Market in Canada report from Mortgage Professionals Canada always shares interesting insights into trends over the previous year — and the 2019 edition is no exception.

While it feels hard to believe that 2019 was less than five months ago with the ongoing COVID-19 pandemic creating so many disruptions and shifts, we can still gain valuable insights from the trends that preceded it.

We have compiled highlights from the Annual State of the Mortgage Market in Canada Year End 2019 that analyze homeownership composition, mortgage rate trends, home equity usage, down payment sources, and more.

Homeownership Composition

 According to Mortgage Professionals Canada:

  • There are an estimated 9.91 million owner-occupied dwellings in Canada and about 6 million of these have mortgages.
  • About 1.45 million households in Canada owned their home with a mortgage and a HELOC.
  • Only 350,000 households owned their home without a mortgage and with a HELOC.
  • 56 million households have neither a mortgage nor a HELOC.
  • There are about 4.82 million tenants.

Fixed-Rate vs. Variable-Rate Mortgages

About 74% of mortgage holders have fixed-rate mortgages.

  • 21% have variable-rate.
  • 5% have combination mortgages.
  • The majority of homeowners have amortizations of 25 years or less, however, the percentage of homeowners choosing longer amortization periods of more than 25 years has gone up slightly in recent years.
  • In 2019, the posted rate for five-year terms averaged 5.27%, however, the average mortgage rate for new homes was 3.14%, which the report said indicated a “substantial amount of discounting in the mortgage market.”

 Home Equity

  • 88% of homeowners have equity ratios of 25% or higher (including owners with housing-related debt).
  • Among the six million homeowners with mortgages (with or without a HELOC) 81% have equity ratios of 25% or higher.
  • The average approved HELOC is $152,000 but the actual owed average is about $59,000.
  • 6% of all homeowners took out equity from their homes during 2019 (slightly lower than in prior years).
  • The average amount taken out in 2019 is estimated at $72,000.
  • Takeout was most frequent by homeowners who purchased their homes between 2005 and 2009.

Reasons for Taking Out Home Equity

  • Debt consolidation or repayment (23%)
  • Renovation or home repair (39%)
  • Purchases, including education (12%)
  • Investments (18%)
  • Gift or lend money to a family member to purchase a home (2%)
  • Other (6%)

First-Time Homebuyers

  • The average down payment by first-time homebuyers has been fairly stable over time, hovering around the 20% mark.
  • Most first-time homebuyers use more than one source of funds; only 45% used just one source.
  • 36% used two sources and 19% used three sources.
  • The most common sources of down payments in the 2015-2019 period were:
    • Personal savings or co-buyers personal savings (88%)
    • Gift from parents/other family members (40%)
    • Loan from parents/other family members (20%)
    • Loan from a financial institution (26%)
    • Loan from an employer (6%)
    • Withdrawal from RRSP (32%)
    • Other (3%)

Read the full Annual State of the Mortgage Market in Canada Year End 2019 here:—year-end-2019-(english).pdf

What highlights stood out to you and what will you take away, even as the COVID-19 pandemic continues? Share with us on social media. Purview is on FacebookTwitter, and LinkedIn.

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