OTTAWA — Recent Canadian homebuyers have a “a high level of financial literacy” and many are paying off their mortgages at accelerated rates, according to a Canada Mortgage and Housing Corp. survey released Wednesday.
The survey of 3,512 recent mortgage buyers found 75 per cent of respondents agreed that it was “very important” to pay off their mortgages as soon as possible — and 39 per cent said they had set payments higher than the required minimum.
As well, 20 per cent said they had made at least one lump sum payment since obtaining their mortgage.
“As in 2010, the 2011 survey findings indicate that Canadians feel confident in how they manage their mortgage debt,” the CMHC report said.
“Over 80 per cent of recent buyers reported doing some level of household budgeting. While establishing this budget, a majority also reported that they had assessed, to some degree, the potential impact of rising interest rates on the budget, assessed to some degree the potential impact of a loss of income on the budget, or assessed to some degree the potential impact of rising expenses on the budget.”
The report adds that recent buyers also seem to good savers, with 80 per cent indicating they had contributed to a retirement, savings or education fund.
Overall, the survey suggested that Canadians taking on mortgage obligations were entering into debt with eyes wide open.
Bank of Canada governor Mark Carney warned as recently as last week that he was concerned about rising levels of indebtedness and that many Canadians appeared not to appreciate that rates will need to rise and mortgage servicing will become more onerous.
As well, Statistics Canada reported this week that household debt to disposable income had reached a record of above 147 per cent.
But according to the CMHC survey, eight in 10 respondents said they had researched mortgage terms and conditions carefully, 88 per cent had a good understanding of how big a mortgage they could afford and 81 per cent had some form of savings.
On average, homebuyers took 11 months to plan their purchase and recent buyers took about five weeks to research the best mortgage for them.
“The investment in homeownership is not entered into quickly,” the CMHC said.
However, homebuyers were not accessing all the help that is available.
It said research showed that during their mortgage research, just 23 per cent of first-time buyers received advice on budgeting and 18 per cent on managing debt.
In addition, the survey found that one in four recent buyers were not sure of where to go to receive reliable advice in case of financial difficulty.
CMHC said areas in which mortgage and financial professionals can offer advice and guidance are long-term mortgage and financial strategies, budgeting and managing debt.
The online survey of recent mortgage consumers was conducted between Feb. 25 and March 25.
For all your mortgage needs call: Eduarda (Eddie) Pita - 416-920-9931
Article courtesy of: http://www.moneyville.ca/article/1013270--canadians-aim-to-pay-mortgages-sooner-survey
