Canadians are taking on larger mortgages, but are they having trouble paying them down?
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Canadians are taking on larger mortgages, but are they having trouble paying them down?
According to TransUnion, they aren’t.
The average mortgage loan balance jumped nearly 5% year-over-year to $198,781, according to the agency’s latest Industry Insights Report. However, serious delinquincies (60 days or more past due) dropped four basis points to 0.56%.
“Home values continue to rise compared to the previous year, pushing overall mortgage debt levels up. However, we did observe an easing of this trend in the second quarter from the previous quarter,” Matt Fabian, director of research and industry analysis for TransUnion Canada, said. “Despite increases in mortgage debt, serious delinquency rates remain low with very little volatility observed over the past two years. Consumers have so far been able to manage their mortgage obligations despite the increasing balance levels. We will continue to monitor these trends especially as interest rates rise, though we don’t anticipate a material impact on mortgages in the near term.”
The drop in serious delinquencies marks the third consecutive quarter of declines.
Active mortgage accounts increased 1.2% to 6 million, according to the agency, and new account balances are also increasing by an average of 8% to $280,093.
“With the macroeconomic backdrop of a growing economy, low unemployment and strong consumer confidence, we observed robust growth in instalment and auto loans,” Fabian said. “At the same time, credit card volumes show signs of continued saturation and lines of credit remain relatively stagnant, albeit with potential opportunities for lenders in specific markets.”
Despite overall growth, it’s clear last year mortgage rule change have had an impact on new mortgages.
The agency reported a 10.4% decline in origination volumes in Q1 2017 compared to Q1 2016.
That included a 12% drop in prime mortgages and a 5% decline for “super” prime consumers.
“Recent new regulations in Ontario appear to have had an impact on the volume of home sales and, consequently, mortgage demand,” Fabian said. “So while the number of mortgages is increasing, it is doing so at a slower rate than last year.”
According to TransUnion, they aren’t.
The average mortgage loan balance jumped nearly 5% year-over-year to $198,781, according to the agency’s latest Industry Insights Report. However, serious delinquincies (60 days or more past due) dropped four basis points to 0.56%.
“Home values continue to rise compared to the previous year, pushing overall mortgage debt levels up. However, we did observe an easing of this trend in the second quarter from the previous quarter,” Matt Fabian, director of research and industry analysis for TransUnion Canada, said. “Despite increases in mortgage debt, serious delinquency rates remain low with very little volatility observed over the past two years. Consumers have so far been able to manage their mortgage obligations despite the increasing balance levels. We will continue to monitor these trends especially as interest rates rise, though we don’t anticipate a material impact on mortgages in the near term.”
The drop in serious delinquencies marks the third consecutive quarter of declines.
Active mortgage accounts increased 1.2% to 6 million, according to the agency, and new account balances are also increasing by an average of 8% to $280,093.
“With the macroeconomic backdrop of a growing economy, low unemployment and strong consumer confidence, we observed robust growth in instalment and auto loans,” Fabian said. “At the same time, credit card volumes show signs of continued saturation and lines of credit remain relatively stagnant, albeit with potential opportunities for lenders in specific markets.”
Despite overall growth, it’s clear last year mortgage rule change have had an impact on new mortgages.
The agency reported a 10.4% decline in origination volumes in Q1 2017 compared to Q1 2016.
That included a 12% drop in prime mortgages and a 5% decline for “super” prime consumers.
“Recent new regulations in Ontario appear to have had an impact on the volume of home sales and, consequently, mortgage demand,” Fabian said. “So while the number of mortgages is increasing, it is doing so at a slower rate than last year.”
