After a good 2014, what we can expect from mortgages?

Most of us see December as a time to reflect on all we’ve accomplished that year. In the mortgage industry, the Canadian Association of Accredited Mortgage Professionals (CAAMP) uses this time to reflect on all that’s happened in the residential mortgage market. The annual report the organization releases each November includes data from various sources, including a survey of more than 2,000 Canadians. Here are some of the most interesting facts we pulled from this year’s report:More Canadians are becoming comfortable with variable rate mortgages. In fact, 20 per cent of those who bought homes in 2014 went with a variable rate, which is up 11 per cent from the nine per cent who did so in 2013. We suspect this increase comes from more than four years of watching Prime sit at three per cent, which makes variable rates seem less “risky.”It’s not surprising that the average mortgage rate on all home purchases in 2014 dropped to 2.89 per cent (from 3.23 per cent in 2013). Both fixed and variable rates have been low all year, but those who went variable got some of the best mortgage rates that the residential market has ever seen. As of Dec. 2, the best five-year variable mortgage rate in Ontario is just 2.10 per cent (Prime – 0.90 per cent).Some more good news: the average down payment on the 10 million homes purchased in 2014 was 21 per cent of the purchase price! When asked why they bought homes, CAAMP found Canadians saw homes as 70 per cent a place to live and 30 per cent as an investment. For that reason, it’s not surprising that 91 per cent of the new buyers reported being happy they became homeowners, and many felt mortgages were a “good debt” to take on.While mortgage debt climbed this year (from $1.19 trillion to $1.3 trillion), so did the number of Canadians who are now 100 per cent mortgage debt-free. According to the report, 3.98 million homeowners have paid off their mortgages; that’s 41 per cent of all homeowners.Of course, that leaves 59 per cent of Canadian homeowners with some amount of mortgage debt on their plates – and pulling out equity from a home counts as part of that. In total, this year, $63 billion of equity was taken out of homes and used for debt consolidation, home renovations, investments, education and other purchases.As for 2015, while no one has a crystal ball, most economists agree that there’s not likely to be any notable increase in mortgage rates next year. In its latest rate announcement on Dec. 3, the Bank of Canada once again maintaining its target for the overnight rate at one per cent, citing Canada’s economy as showing signs of a broadening recovery. Stronger exports are leading to increased business investment and employment, which suggests the rebuilding that will lead to balanced and self-sustaining growth may finally have begun, BoC says.The Bank’s next rate announcement is scheduled for Jan. 21, 2015.