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Homeowners aim to pay off mortgages fast
2010-01-26
Canadians who have recently purchased, renewed or refinanced a mortgage want to quickly pay off their debt, a survey by the Canadian Mortgage and Housing Corporation indicated Wednesday.
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Seventy-eight per cent of respondents said they wanted to pay their mortgages off as fast as possible and one-third said they had made a lump-sum payment toward that end.
The results indicate a strong tendency amongst Canadians to take advantage of opportunities to aggressively tackle housing debt, a sign homeowners are "fundamentally cautious" about their housing debt, CMHC said.
Eighty-four per cent of homeowners who are making weekly or biweekly payments on their mortgages are doing so at an accelerated rate in order help to shorten their amortization period, according to the mortgage insurer.
In addition, half of the participants indicated that whenever possible, they would use extra money to pay down the principal on their mortgage.
"The fact that new homeowners are working to pay down principal early and are accelerating payments is a good indication that this responsible behavior will continue throughout the life of their mortgage," said Pierre Serre, vice-president of insurance products and development for CMHC.
The agency conducts a survey each fall to look at trends in mortgage consumer behavior. This year's survey, conducted in the fall of 2007, focused on the purchaser segment of the market.
The current survey found Canadians have a high level of confidence in their debt-management abilities. Eighty-eight per cent were confident they could handle their mortgage debt load.
Satisfaction with mortgage services was also high, with 85 per cent expressing satisfaction with the mortgage process. There is a trend toward using mortgage brokers, however. The number of Canadians using brokers rose to 33 per cent, up from 27 per cent in last year's survey.
The survey was based on a national sample of over 1,400 first-time buyers, repeat buyers, mortgage renewers and refinance consumers.
Source Canadian Press
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