The Canadian housing industry is constantly changing and so are the statistics of Canadian Mortgage industry.
Year-Over-Year and Quarter-Over-Quarter comparisons provide spellbinding insights into Canadian mortgage trends.
Mortgage Rate Trends
In January of 2019, Mortgage professionals of Canada released its State of the Mortgage Market Report. The report also includes an assessment of the mortgage stress test, it also highlighted other statistics about what all is happening across the industry.
According to the reports, in 2018:
- 3 million homeowners had mortgages, out of total 9.8 million homeowners in Canada.
- 6 million Canadians had Home Equity Line Of Credit (HELOC)
- 68% of mortgages in Canada had fixed interest rates
- 27% of mortgages had variable and adjustable rates
- 89% of mortgages had an amortization period of 25 years or less
- The average amortization period was 22.2 years
- The average mortgage interest rates in Canada was 3.09%, up from 2.96% in 2017
- 68% of those who renewed in 2018 saw their interest rates rise.
Home Equity Trends:
- Canadian homeowners had an average of 74% home equity.
- 10% of homeowners took out equity in 2018 (up from 9% in 2017)
- The average homeowner took out $74,000 in equity ( up from $54,500 in 2017)
Most frequent utilization for equity includes:
- Investments ($23.8 Billion)
- Home renovation and repair ($17 billion)
- Debt consolidation and repayments ($16.4 billions)
- Purchases ($8.6 billions)
- Other ($6.2 billions)
Home Buying Trends:
- There was a 11% drop in resale activity from 2017 to 2018
- The average down payment made by first-time home buyers was 20%
The top sources for down payments were:
- Personal Savings (52%)
- Funds from parents or family members (20%)
- Loan from a financial institution (19%)
- Withdrawal from RRSP (9%)
As of November 30, 2018, The Canadian Bank Association reported that out of 4,759,706 mortgages in Canada, 0.24% were in arrears – 11,246 or, about one in 423 mortgages.
Saskatchewan had the highest arrears rate with 0.82% (1,064 or 130,328 Mortgages)
Ontario had the highest amount of mortgages (2,008,299) but the lowest arrear rates (0.09%) with 1,836.
Mortgage Broker Lender Share
In 2018, Canada’s big 5 banks lost 2.7% of the market share in Ontario in 2018, according to the 2019 Q1 Teranent Market Insight Report.
Teranet also found that mortgage refinancing was down to 48.7% in 2018 from 54.6% in 2017, but switches were on the rise, going from 45.4% in 2017 to 53.1% in 2018.
In the switch-outs themselves, more mortgage were moving away from the largest financial institutions and towards the replacement, such as credit unions, private mortgage lenders, and trust companies
According to the Canadian Mortgage Trends, in Q4 of 2018, Scotia Bank led with 28% market share. First National followed with 13% of market share, and then MCAP/RMG with 10.8%, TD Canada Trust with 9.6% and Merix Financial with 6.3%