Canadians are coming to terms with debt.
Some 36 per cent of homeowners say they are now fast-tracking their mortgages through lump-sum payments, increased monthly payments or by paying weekly or biweekly rather than monthly, according to an annual survey.
In other words, homeowners have heeded the words of Finance Minister Jim Flaherty who has warned that Canadians are carrying too much debt, says Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals which released its seventh annual report on mortgage debt Wednesday.
Homeowners are also looking for ways to “insulate” themselves from any possible hikes in interest rates, says the annual State of the Residential Mortgage Market report, a survey of 1,031 Canadians with mortgages.
Some 78 per cent of those who renewed or refinanced their mortgage in the past year saw a reduction in their rate. Twenty-one per cent switched to a new lender and mortgage brokers continue to grow in popularity over banks, now accounting for 27 per cent of the market, said Murphy.
Ten years ago just 5 or 6 per cent of homeowners got mortgages through brokers, once seen as lenders of last resort. Now they are seen to offer some of the best rates and flexibility, especially for young, first-time buyers.
Most dramatic over the last year has been the decline in homeowners taking equity out of their homes. Just 10 per cent of those surveyed have done an equity takeout the past 12 months, a 40 per cent drop from 2010.
Fixed rate mortgages remain the most popular (60 per cent) compared to variable rate mortgages (31 per cent.)