Stats on Mortgage Psychology

Here's some interesting insights into the minds of Canadian mortgage shoppers, courtesy of RBC's 2007 Homebuyers Survey.

  • 66% of Canadians say it's difficult to choose between fixed and variable rate mortgages.
  • Despite the potential interest savings, only 12% of fixed-rate shoppers would choose a variable rate mortgage instead.
  • The biggest reason people don't choose variable rate mortgages is fear of changing monthly payments.  The truth is, fixed monthly payments and variable rate mortgages are not necessarily mutually exclusive.
  • Most popular mortgage term:  5-year (46% choose it)
  • Average mortgage balance:  $105,557 (up 10% since last year!)
  • Percentage of Canadians with home equity loans:  39%

Latest Mortgage Broker Statistics

CMHC says 27% of Canadians use mortgage brokers, according to their latest mortgage consumer survey.

This number differs, however, from a recent CIMBL survey–which pegs the number at 31%.

More amazing was the finding that only 43% of mortgage seekers "shopped for several proposals."  The fact that this was not closer to 100% means that tens of thousands of people overpaid for their mortgage in 2006.  (There is little excuse not to utilize a mortgage broker to pit multiple lenders against each other for your benefit.)

CMHC also found that…

  • 71% of people refinanced before their mortgage term was up.
  • The number of people using mortgage brokers to shop for mortgage renewals jumped from 8% to 13% this past year.

The National Post had a few words about CMHC's survey as well.  They noted that 81% of people renewed their mortgage with their existing lender.  This was largely due to "convenience" (read laziness).

Moreover, many people seem to fear an onerous re-application process.  That is a misconception since the renewal application process is actually a breeze if you let a mortgage broker do the legwork.

One of the major inroads for mortgage brokers in 2006 was with "refi's."  According to the National post, 65% of people stayed with their current lender when refinancing in 2006.  This fell sharply from 83% the prior year, as brokers steered more and more clients into lower cost alternatives.

Canadians’ Debt Up 47.5% in 6 Years

Ottawa released its 2005 Survey of Financial Security on Thursday (better late then never!).  It had some interesting mortgage-related stats:

  • About 1/3 of Canadians have mortgages on their home.
  • The median mortgage (in 2005) was $90,000.  You can tell this is an old stat.  It's probably closer to $100,000 today due to Canada's hot housing market.
  • The average Canadian's debt is up a staggering 47.5% since 1999.  Mortgages make up 3/4's of this debt.

Canadians’ Debt Up 47.5% in 6 Years

Ottawa released its 2005 Survey of Financial Security on Thursday (better late then never!).  It had some interesting mortgage-related stats:

  • About 1/3 of Canadians have mortgages on their home.
  • The median mortgage (in 2005) was $90,000.  You can tell this is an old stat.  It's probably closer to $100,000 today due to Canada's hot housing market.
  • The average Canadian's debt is up a staggering 47.5% since 1999.  Mortgages make up 3/4's of this debt.