Many Canadians are aggressively reducing their mortgages by making lump sum payments, increasing monthly payments and reducing amortization periods, revealing confidence and financial flexibility in a stable mortgage environment, according to a recent survey by the Canadian Association of Accredited Mortgage Professionals (CAAMP).
22 per cent of mortgage borrowers increased their payments during the past year; 18 per cent made a lump sum payment; 9 per cent did both and 27 per cent who renewed increased their payments;
For mortgages repaid in the last 20 years, one third were paid off early;
Home Equity Lines of Credit (HELOC) represent 22 per cent of all mortgages, making these lines of credit a $215 billion industry;
On average, Canadian homeowners have $222,000 in home equity, equal to 66 per cent of the value of their homes;
During the past year, homeowners borrowed $26 billion in additional equity from their homes.
15 per cent of homeowners withdrew equity, averaging $30,000;
Investments (28 per cent) replaced debt consolidation (19 per cent) as the number two use of home equity takeout. Home renovations remain number one (36 per cent).
"Prudent management of their mortgage debt has paid off for Canadians," said Jim Murphy, AMP, President and CEO of CAAMP. "By taking advantage of low interest rates, we have been paying down our mortgages. As economic confidence returns in Canada, many survey respondents have told us they now feel comfortable using some of that equity to improve their homes and to invest," said Murphy