Canadians appear well prepared to face the new phase of the residential mortgage market, where interest rates are rising and house activity is easing off, according to the sixth biannual review of the Canadian mortgage market by the Canadian Association of Accredited Mortgage Professionals released today.

Highlights of the report include: consumer concern about rising rates is offset by increasing home equity; many mortgages were renegotiated at lower rates and amortization periods are declining; many Canadians have used cost savings from low rates to pay more than required, providing flexibility to deal with mortgage rate increases; mortgage debt is a priority – the vast majority of Canadians have never missed a payment and; a high percentage of Canadians still believe it is a good time to buy a home.

The report entitled Prudence Paying Off For Canadian Mortgage Borrowers is authored by CAAMP Chief Economist Will Dunning and based on information gathered by Maritz Research Canada in a survey of Canadian consumers conducted in April 2010.

The CAAMP survey report reveals the average outstanding principal is $138,000 and for mortgage borrowers the average amount of equity represents 53 per cent of the average value of homes ($297,000). Approximately 11 per cent of mortgage borrowers withdrew equity from their home in the past year, totalling $20 billion, a substantial reduction compared to the $34 billion estimate of 2009.

“Our spring survey report reveals a remarkably mature borrower,” said Jim Murphy, AMP, President and CEO of CAAMP. “We find that Canadians have taken advantage of the low interest rates to increase their regular payments (16 per cent) and make lump sum payments (13 per cent). This planning puts them in a stronger position to weather more expensive borrowing.”