Living in Toronto
Sometimes, We need to check our facts and perspective from time to time.
I always thought that people would finance with the shortest and lowest interest rate possible.
68 per cent of mortgage holders have fixed rate mortgages, while 27 per cent have variable and adjustable rate mortgages. Fixed rate mortgages are the most popular among people between the ages 18 and 34, while those in the 55+ age group are more likely to prefer variable rate mortgages.
Rather a surprising statistic given that most of the first time buyers are consumed with obtaining the lowest interest rate. I made a quick couple of calls to recent buyers and they all confirmed they had selected the fixed rate program.
Garth Turner of the Greater Fool fame is oft mentioning the highly leveraged and Real Estate Bubble that is bursting in Canadian housing market;
Average amount of equity Canadians holding a mortgage have in their home is $142,000, representing 52 per cent of the value of their homes. Approximately one third of homeowners do not hold a mortgage and have an average $322,000 of equity in their homes. Overall, Canadian homeowners have 74 per cent equity in their homes.
What a vast difference to the Media reports of the over extended over financed Canadian Mortgage market. Last week I found a complete article on the collusion on the part of CMHC to induce borrowers to maintain and increase mortgage debt. The article went on to say that CMHC was causing the price increases because of the borrowing specials.
You are welcome to read the entire article from the source. Click here
Please feel free to add your comments or observations.