Mortgage debt tops $1 trillion

Canadians are holding more than $1 trillion worth of mortgage debt, the first time the total has passed that level, and a 7.6 per cent increase over the past year.

The gain in the country’s total residential mortgage debt is in keeping with the 7.5 per cent average seen over the past fifteen years, the Canadian Association of Accredited Mortgage Professionals (CAAMP) said in its annual report Monday.

Over that time, Canadians total mortgage debt has increased by 194 per cent.

Although the total debt load is eye-popping, people who have a mortgage are managing quite well, the report says. Among homeowners who have mortgages, the average amount of equity is about $146,000, or 50 per cent of the average value of their homes.

The average price of a home sold in Canada hit $331,089 in September, the most recent data from the Canadian Real Estate Association shows.

“Canadians are being smart and responsible with their mortgages,” CAAMP president Jim Murphy said. “They are building equity in their homes and making informed, long-term mortgage decisions.”

Some 5.65 million Canadian homeowners have some sort of mortgage, and there are 3.75 million Canadian homeowners who own their homes outright. Overall, home equity is at 72 per cent of the total value of housing in Canada.

The average mortgage interest rate for home owners with a mortgage is 4.22 per cent, a drop from 4.55 per cent a year earlier, the report found.

Roughly one in five Canadian homeowners took equity out of their homes in 2010, with the average withdrawal being $46,000.

And more people stepped up their payments compared to 2009, the report says. More than one in three mortgage holders have either increased their payments or made a lump sum payment on their mortgage in the last year. news nov 8,2010
Pam Martin, Invis, Mortgage Broker, Mortgage Rates, Kelowna,Vernon, Penticton, Okanagan, British Columbia, Canada