A new study by Canada Mortgage and Housing Corporation (CMHC) shows that Canadians are well informed about mortgage options and intend to pay down their mortgages quickly. A recent survey polled 2500 active mortgage users in Canada and turned up some interesting results:
- 89% looked online for mortgage info
- 84% researched mortgage terms and conditions before deciding on a mortgage option
- 69% of first time buyers used a mortgage calculator and 85% said they had a good understanding of the size of mortgage they could afford before buying a home
- The average home buyer took 12 months to plan their purchase
- 81% of recent home buyers are comfortable with their current level of mortgage debt
- 68% feel there is a strong chance they will pay off their mortgage sooner than required
- 27% have already taken steps to pay down their mortgage through lump sum payments or increased regular payments
Frequently there is discussion on this blog about long amortizations, and increasing interest rates and whether Canada will see a mortgage melt down like we've witnessed in the US. Of course, our position has always been that we are in a far better position than our neighbours to the south. This survey shows me (again) that Canadians tend to be very well informed and take time to make home buying decisions. In large part it comes down to the tax system - mortgage interest is tax deductible in the US but not in Canada. I would say that Canadians see more benefit to paying off their mortgages quickly than Americans.
This study comes out the same day that RBC announced the third increase to mortgage rates in a month - further encouragement to pay off your mortgage quickly!