low mortgage rates. This article from the Financial Post explores newly released statistics that show the efforts Canadians are taking to pay their mortgages down faster.
At one time, taking a mortgage at a variable rate seemed like the best way to save on a mortgage. Now, with rates at historic lows, even those who started out with a variable mortgage are renewing with a low fixed rate and a longer term. Facing uncertainty surrounding the direction interest rates will take later this year, locking in for a ten year term offers a sense of security a variable rate wouldn't necessarily provide. CAAMP's report shows that 14% of the 3.8 million Canadians holding a fixed rate mortgage made this choice within the past year. It is also reported that in 2011, Mortgage Brokers accounted for 26% of the overall market, showing the necessity for qualified mortgage advice.
In addition to taking advantage of low rates, a large percentage of Canadians are using pre-payment privileges to decrease debt. We learn that 23% increased the amount of their regular payments, 19% made lump sum payments and 10% did both. An encouraging 50% of borrowers pay at least $100 more than required on their monthly payments. Jim Murphy, chief executive of CAAMP, reports these statistics show that the majority of Canadians are in a position to safely absorb a potential interest rate increase.
Click here for the full article from the Financial Post.