Exclusive: MPC Survey: 76% mortgage holders anxious about renewal

Mortgage Professionals Canada’s latest survey shows that mortgage owners and non-owners are both experiencing increasing financial anxiety.

According to the Association’s survey, 76% of mortgage holders who will be renewing their loans in the next 12 months are worried about the renewal process. This is a 10% increase over last year. Report on the Semi-Annual Housing Market.

According to the latest figures, 70 percent of Canadians are concerned about their financial future, an increase of seven points since last year.

Lauren van den Berg is the President and CEO at MPC. She said, “Canadians face an unprecedented crisis of housing affordability, which has been exacerbated due to high interest rates, economic instability, and other factors.” Our findings show the need for urgent policies to address and help current homeowners and those who are aspiring. “We remain committed to advocating measures that make homeownership accessible and sustainable for Canadians.”

Concerns extend beyond homeowners. Over half of non-owners (51%) now think they’ll never buy a house, up from just 18% in two years. Just 16% of the non-owners plan to purchase a primary residence in the next 12 months. This is a seven point drop from last year.

The semi-annual MPC consumer survey is based on the results of a sample of almost 2,000 Canadians, and was conducted earlier this year by Bond Brand Loyalty.

The tide may be changing for consumers

Canadians are largely optimistic about the economy, despite the increased anxiety that comes with the renewal of loans at higher rates.

The Bank of Canada’s announcement of a rate cut is expected to increase optimism. Delivered This is the expected first in a series of rate reductions this year.

More than half of those who plan to renew their membership in the following 12 months (52%) have a positive outlook for the economy. This is an increase of two percentage points over the year before. Although this is still 18 points below pre-pandemic levels.

Even though interest rates are high, about 80% of the respondents still see real estate investment as an excellent long-term option, which is a 7-point improvement from last year.

More than 90% of homeowners are satisfied with their choice to buy a home.

Joe Jacobs is the Chair of MPC’s Board of Directors. “Despite current challenges, Canadians still have a strong belief in real estate, as an investment that will pay off over time,” he said. This enduring belief highlights the importance of working closely with a professional mortgage advisor.

The survey confirms that more Canadians turn to mortgage brokers when they need home loans.

Over a third of recent homebuyers (34%) used a broker to obtain their last mortgage. This is up by four percentage points from the previous year.

The share of mortgage brokers is higher for first-time homebuyers (46%) than it is among those who have purchased within the last two years (45%). On a regional basis, Ontario (40%) is the highest (+10 points). Quebec (40%, +6 points) and Ontario (40%) are the most likely to use a broker. Most likely to use a broker.

When it comes to their future plans, 62% said that they were somewhat or very probable to use a mortgage broker.

Mortgage market

Home mortgage types

In 2023, 70% of all mortgages will be fixed rate (+1 point from 2012). From 2022, the percentage of mortgage holders with fixed-rate mortgages increased to 70% (+1 pt.
- In the last 12 months, 12% of respondents said that they had locked in a rate from a fluctuating one.
Rates on 23% of mortgages are variable or adjustable (-2 points).
- 28 % of variable rate borrowers have said that they considered a lock-in but ultimately decided against it.
3 % of mortgages are a mix of variable and fixed, also known as hybrid (unchanged).

Mortgage Terms

57% have mortgages with a term of five years
The term of 10% is three years
6% of the delegates have 4-year terms
4% of the 6% have a term that is 2 years

Paying Down Payments

60 %: People who would not have been able afford their house without help with the down payment. (-1 point. From 2022
Average downpayment made last year by buyers: $70,578 (down $1614 since 2022).

All buyers should consider the following sources for their downpayment funds:

Savings of 58% (+2 points)
8 %: Presents received from your parents or family (-3 points)
4%: Parental or family loan (unchanged).
Withdrawal of RRSPs (-1)
Other Sources (-1 point)

Renewals

Mortgage holders are expecting to renew 70% of their loans within three years.
- 23% of respondents expect to renew their subscriptions next year
- 25% of respondents expect to renew their membership within two years

Negotiation

Mortgage holders accepted 44% the rate that was offered by their lenders during their most recent renewal. (+3 points. From last year
Only 8% said that they had “significantly” bargained their rates (- 8 pts.

Refinancing

69% of Canadians do not consider refinancing a mortgage. (- pts. From last year
In the last year, 5% of mortgages have been refinanced.
- Canadians aged under 34 have already refinanced two times as much as Canadians between 35 and 54.
- 52% have used the same mortgage broker that helped them with their original purchase, while 26% changed brokers.
- 73% of respondents remained loyal to their lender (- pts. From 2022, 15% of customers switched to a new lender. (-1 pt.)
9 % of those that refinanced paid a penality (-1 point)
The average amount of penalty for refinancing an mortgage is $3,511, down from $5,173 one year earlier

Earnings Takeout

Refinancing is a great way to save money.
- Refinancing has accounted for 16% of equity taken out by homeowners in the last year (+2 points).
- Refinancing average equity of $92,838 (up by $32,428 since 2022).
How to use a Home Equity Line of Credit (HELOC).
- 9%: Homeowners who have taken equity from their house in the last year through their HELOC (+1 pt.).
- Average amount of money borrowed by HELOC customers is $37 495 (down $4 165 in 2022).

The most common use of the money is:

Home renovations and repairs: 34% (-2 points). year-over-year)
33% for debt consolidation (+1 point)
23%: For purchases (no change)
Investments: 15% (- 6 pts.
To give or loan to family (-1 point)

Accelerating mortgage payments is possible through certain actions

Mortgage holders have taken action to reduce their amortization period by 40% (- 5 pts.).
- 16 % made a one-time payment.
  - Average lump-sum payment was $22,962 (plus $1460).
- The amount they paid increased by 15% (-3 points).
  - Average monthly increase in voluntary payments was $699 (plus $88)

Mortgage professionals are available to help you.

Mortgage brokers were used by 34% of mortgage applicants (+5 points). year-over-year)
- First-time home buyers use mortgage brokers in 46% (+1 point)
- 45% of people who bought within the past two years (+5 points)
- 40 % of the population in Ontario (+ 10 pts.
- 40 % of the Quebec population (+6 points)
- 38 % of people aged 35 to 54 (+8 pts).
- 37 % of 18-34 year olds (+4 pts.
Banks were used by 54% of borrowers for mortgages (- 6 pts.).

Mortgage professional outreach

This is the average number of professionals that consumers consult when they obtain their mortgage.
The number of quotations they have received on average

Why consumers are hesitant to use a broker

Mortgage brokers typically receive compensation through commissions paid by lenders. This shows a lack of knowledge about the way they are compensated.
17% said that they did not think a broker would be able to get them a more favorable deal
13 percent of respondents said that they don’t know how brokers get paid
11 % of respondents said that they do not trust brokers, or the brokering process.

Bank clients are more satisfied with their broker services than bank customers

Easy to do business
- Bank clients get 35%
Reliability: 37%
- Bank clients get 35%
Contact frequency during the mortgage process: 37%
- Bank clients get 30% off
Understanding of the mortgage market and products is 37%.
- Bank clients: 34%
36%: Offering competitive mortgage rates
- Bank clients: 31%
Assuring personalized service
- Bank clients: 27%
Contact level post transaction: 27%
- Bank clients: 27%