Of mortgage holders facing renewal in the coming 12 months, 69% say they are anxious about the process, marking a seven-percentage-point decrease from last year, according to Mortgage Professionals Canada’s mid-year update of its Semi-Annual State of the Housing Market Report.
In total, nearly a third of Canadians expect to renew their mortgage in the coming year, while more than three quarters (77%) will see their mortgage term renew within the next three years.
In anticipation of their upcoming mortgage renewal and expected payment increase, 61% of borrowers report cutting back on spending to manage their mortgage obligations.
Additional actions and concerns cited by respondents in anticipation of their renewal include:
- 17%: Changing jobs, taking on additional work, or planning to do so to afford mortgage payments
- 14%: Concerns about missing one or more mortgage payments
- 10%: Renting out a room or having already done so to offset mortgage costs
- 10%: Selling their home or planning to sell it to manage payments
- 4%: Already missing one or more mortgage payments
Overall, more Canadians say they are less comfortable with their monthly cash flow and debt levels compared to a year ago. Over a third (34%) say they are uncomfortable with their monthly cash flow (+5 pts. from last year), while 38% are uncomfortable with their level of debt (+4 pts.).
Ongoing financial anxiety continues to impact Canadian mortgage holders and non-owners, although stress levels are showing signs of improvement.
According to the survey, 43% of non-owners now believe they will never be able to purchase a home, a decline of seven percentage points compared to last year’s mid-year survey results. On the other hand, 18% of non-owners expect to buy a home within the next year, and an additional 25% anticipate entering the housing market within the next two years.
Overall, 42% of respondents now say it’s a good time to purchase a home in their community, an improvement of 11 points from a year ago.
A deep-dive into the survey results…
The mortgage market
Mortgage types
- 75% of mortgage holders had fixed-rate mortgages in 2024 (+3 pts. from 2023)
- 77% said their rate has always been fixed
- 8% said they locked in from a variable rate within the past 12 months
- 20% of mortgages have variable or adjustable rates (-3 pts.)
- 14% of variable-rate borrowers said they switched from a fixed rate within the past 12 months, while 24% switched from a fixed rate more than 12 months ago
- Of those who switched from a fixed rate, 78% waited until their renewal, 17% broke their mortgage early and 5% don’t know
- 3% of borrowers have a combination of fixed and variable, known as “hybrid” mortgages (unchanged)
Penalties
- 10% of respondents said they paid a penalty when breaking their most recent mortgage (-1 pt. from last year)
- 47% recall discussing potential penalties with their mortgage professional (-2 pts.), while 27% said penalties weren’t discussed and 26% don’t recall
- $4,371: The average penalty paid
Renewals
- 77% of mortgage holders expect to renew their mortgage within the next three years
- 30% expect to renew within the next 12 months
- 55% expect to renew within the next two years
HELOCs
- 44% of current borrowers say they have access to a Home Equity Line of Credit (HELOC)
- 51% of borrowers with access to a HELOC have never borrowed against it
- $115,901: The average amount of home equity the average borrower has access to via their HELOC
- $32,672: The average amount borrowed from their HELOC
Most common uses for HELOC funds include:
- 38%: For home renovation (+2 pts. from two years ago)
- 37%: For debt consolidation and repayment (+4 pts.)
- 29%: To make a purchase (+9 pts.)
- 21%: For investments (-1 pt.)
- 12%: To gift or lend to family members (+4 pts.)
Actions to accelerate mortgage repayment
- 55% of mortgage holders have taken action to shorten their amortization periods (+4 pts.)
- 36% increased the amount or frequency of their payment (-1 pt.)
- 19% made one lump-sum payment (+4 pts.)
- 15% made multiple lump-sum payments
- 28% made both a lump-sum and accelerated payments
- 64% of borrowers say they are familiar with the prepayment privileges on their mortgage
- 27% are very familiar
- 37% are somewhat familiar
- 20% are neutral
- 15% are unfamiliar
Use of mortgage professionals and lenders
Broker share
- 33% of mortgage borrowers used the services of a mortgage broker when they obtained their mortgage (-1 pt. year-over-year)
- 44% of first-time buyers used a mortgage broker (-2 pts.)
- 41% of those who purchased within the last two years (-4 pts.)
- 40% of those in Alberta (+2 pts.)
- 40% of Millennials (+1 pt)
- 40% of Gen X (-2 pts.)
- 56% of mortgage borrowers used the services of a bank
Likelihood to use the same mortgage professional or lender when refinancing
- 64% use their same mortgage professional when refinancing (-1 pt. from last year)
- 24% changed mortgage professionals (+3 pts.)
- 12% don’t know
- 74% used their same lender (-5 pts.)
- 18% changed lenders (+5 pts.)
- 8% don’t know
Current lender type
- 55%: One of Canada’s big banks
- 23%: Non-bank lender or small bank lender
- 10%: Mortgage Investment Corporation (MIC)
- 6%: Credit union, life insurance or trust company
- 4%: Private lender
Opinion towards private lenders
- 38% of borrowers have not used a private lender and would not consider using one
- 28% said they haven’t used a private lender, but would consider using one
- 5% of borrowers say they have used a private lender
- 2% said they have used a private lender and would not consider using them in the future
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Last modified: December 20, 2024
