 |
|
|
|
Consumers Cautious About Mortgage Debt
VANCOUVER, Feb. 20 / - Three-quarters of all respondents to the
2006 Mortgage Consumer Survey conducted by Canada Mortgage and Housing
Corporation (CMHC) indicated that their goal is to pay off their mortgage as
quickly as possible. Moreover, half agreed that, whenever possible, they would
use extra money to pay down their mortgage.
"This study suggests that Canadians are fundamentally cautious when it
comes to their mortgage debt," said Pierre Serré, Vice-President, Insurance
Product and Business Development. "This is particularly true among young
first-time homebuyers."
The survey also indicates that Canadians are well served by the mortgage
industry with an overall satisfaction rate of 84 per cent. When asked about
their preference for a mortgage provider, 86 per cent of respondents indicated
that it is somewhat or very important that their lender be a Canadian
institution.
Relationships with their current financial institutions are very
important to recent mortgage consumers. While 2006 has seen a slight increase
in the percentage of consumers who switch to another financial institution
when renewing their mortgage, the majority of mortgage consumers remain loyal
to their current lender.
Although the proportion of purchasers using the services of mortgage
brokers has remained unchanged from last year's level of 27 per cent, the
percentage of consumers who turn to mortgage brokers for renewal and refinance
transactions increased in 2006.
A growing majority of Canadians (71 per cent) who refinanced their
mortgage in the last year did so before the scheduled renewal time. Among
those who refinanced, the most common reason was for home renovations and
improvements, followed by reducing their overall interest costs.
CMHC's Mortgage Consumer Survey is conducted each fall to examine
consumer behaviour, attitudes and expectations when acquiring, renewing or
refinancing a mortgage. The survey is based on a national probability sample
of active mortgage consumers comprised of first-time buyers, repeat buyers,
mortgage renewers and refinance consumers. The results for the entire sample
are accurate within 2.1 percentage points 19 times out of 20.
As Canada's leading mortgage insurer, CMHC shares a wealth of knowledge
and housing expertise for the benefit of Canadians. CMHC's mortgage insurance
has opened doors for millions of Canadians, giving them the assurance and
piece of mind that comes with homeownership.
As Canada's national housing agency, Canada Mortgage and Housing
Corporation (CMHC) draws on 60 years of experience to help Canadians access a
variety of quality, environmentally sustainable, and affordable homes - homes
that will continue to create vibrant and healthy communities across the
country.
Backgrounder attached.
Backgrounder
------------
CMHC Mortgage Consumer Survey
Understanding today's Mortgage Consumer
Canada Mortgage and Housing Corporation (CMHC) is pleased to present key
results from the 2006 survey of Canadian Mortgage Consumers. Since 1999, the
annual consumer survey has provided a uniquely Canadian perspective into the
changing attitudes and behaviours of mortgage consumers. The survey explores
the dynamics of consumer choice, and mortgage shopping behaviour when
arranging, renewing, or refinancing a mortgage. Consumer usage and attitudes
towards both lenders and mortgage brokers are captured and analyzed. The
survey is based on a national probability sample of active mortgage consumers
comprised of first-time buyers, repeat buyers, mortgage renewers and refinance
consumers. The results are accurate to within 2.1 percentage points 19 times
out of 20.
Highlights from the 2006 CMHC Mortgage Consumer Survey include:
Paying Down Debt is a Top Priority
Seventy five per cent of respondents are in agreement with the goal of
paying off their mortgage as quickly as possible.
Half of all consumers also indicated that whenever possible they would
use any extra money they have to pay down their mortgage.
Canadians Well Served by the Mortgage Industry
Overall, the vast majority of mortgage consumers were satisfied with the
services they received when arranging their mortgage and were equally
satisfied whether they opted to deal directly with a lender or choose to use
the services of a mortgage broker.
When dealing with a mortgage lender, an overwhelming majority of Canadian
consumers feel that it is important that the mortgage lender be a Canadian
institution and that the institution be well known to them.
Personal Connections are Important
The majority of respondents agreed that it is essential to have a
personal relationship with a lender when negotiating a mortgage. Meeting with
your current lender is the most common activity consumers engage in when
shopping for a mortgage. A familiar lender loans officer is felt to be a
reliable source of information (69 per cent use this source) and the majority
who look to their present loans officer for guidance and information find the
information provided to be useful (82 per cent).
Lender Loyalty Remains High
The majority of mortgage consumers continue to remain loyal to their
existing lender. At the same time, in 2006 consumers showed a greater tendency
to switch lenders when arranging, renewing or refinancing their mortgage.
Use of Mortgage Brokers:
The proportion of consumers using the services of a mortgage broker when
buying a home has remained unchanged from last year's level of 27 per cent.
Compared to previous years, an increased proportion of refinance and renewal
customers have chosen to use a broker.
Refinancers Don't Wait to Renew
A large majority of Canadians who refinanced their mortgage in the last
year, did so before the scheduled renewal time.
Renovations One of the Main Reasons for Refinancing
Reinvesting the funds back into the home through home renovations is the
most common reason as to why consumers refinance their mortgage. Almost
one-in-three of those refinancing used the funds to consolidate debt.
|
|
|
