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2017 Digital Money Trends Report: What We Learned About Mortgages

Last week, we released’s 2017 Digital Money Trends Report, where we analyze the relationship between Canadians and personal finance. Specifically, the report looks at trends related to credit cards, saving, insurance, and more.

Here’s what we learned about mortgages.

Canadians believe mortgages will be harder to qualify for

This piece of information wasn’t much of a surprise for us. With two Bank of Canada interest rate hikes this year a new mortgage stress test from the Office of the Superintendent of Financial Institutions (OSFI) kicking in Jan. 1, 2018, it’s no surprise people believe it’ll be harder to qualify for a mortgage in 2018. However, the surprise comes from the fact that only 59% of survey respondents believe it will become harder to qualify for a mortgage — meaning 41% of Canadians believe changes to mortgage rates and regulations will not impact their ability to get a mortgage.

Canadians believe that housing prices will continue to go up

While the majority of survey respondents believe mortgages will be harder to qualify for in 2018, a slightly larger majority of people think house prices will continue to go up in 2018. This level of confidence wasn’t only limited to optimistic homeowners, as 65% of renters believe home prices will continue to increase in 2018.

Canadians are loyal to their primary financial institution

While competition heats up for customers, it seems the average Canadian is remarkably loyal to their primary financial institution. The majority of people surveyed had their mortgages from their primary financial institution, with boomers being the lowest percentage at 43%.

The most interesting part of this loyalty is that the majority of the survey respondents don’t think their primary financial institution would give them the best deal for mortgage rates.

The spread between fixed and variable mortgage rates grew

The spread between five-year fixed and variable mortgage rates expanded in 2017 to 0.57%, with the average five-year fixed rate at 2.46% and the five-year variable rate at 1.89%. The spread between fixed and variable rates has increased over the past year with Bank of Canada rate increases and other factors.

Despite this growing gap, the majority of rate requests received at were still for fixed-rate mortgages.

Millennials are feeling the down payment pinch

Rising home prices have significantly impacted the ability of people to make high down payments on a home, and no generation has been impacted as much as millennials.

More than 70% of millennials with homes purchased the home with a down payment of less than 20%. Millennials were also more likely than any other generational group to get help with from relatives with a down payment — 43% of millennial homeowners received financial help with their down payment.

Millennials still believe in the dream of home ownership

Despite increasing home ownership costs and more regulations surrounding applying for a mortgage, many millennials renters still believe in the dream of home ownership. Forty-one per cent of millennials who don’t have a mortgage listed a down payment as a savings goal. Those millennial renters save an average of 32% of their gross income, suggesting that they take this goal seriously.

While times are changing, a large number of millennials plan to join the ranks of home-owners — even if they require help from the Bank of Mom and Dad to get there.

You can read more about these conclusions, and a whole lot more, in the 2017 Digital Money Trends Report.


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Overnight Lending Rate in Canada