Comments on: CAAMP’s Spring Mortgage Report 2012

By: Robert McLister

Robert McLister — Mon, 11 Jun 2012 21:19:39 +0000

Since publishing this report, we have received some clarifications and new data from report author, Will Dunning. This new information is highlighted in yellow. Cheers…

By: banker in an ivory tower

banker in an ivory tower — Tue, 05 Jun 2012 10:52:04 +0000

Seriously, you need a new hobby besides crystal balling government bond rates every day. Maybe GCAN5yr. bonds do indeed go to 1%, but maybe and more likely, they don’t! Bond traders don’t know and neither do you or I.
History proves time and time again, The Queen’s bank and government fiscal policy can only influence the markets so far.

By: Kelowna

Kelowna — Tue, 05 Jun 2012 00:23:10 +0000

Don’t forget that our population keeps growing which makes mortgage debt grow. It’s been that way for years and unless home prices drop, you almost never see mortgage credit drop.

By: Kelowna

Kelowna — Tue, 05 Jun 2012 00:17:04 +0000

Most of the people with low down payments are first time buyers. The average down payment on a purchase is 30%.
As for amortizations, most people can afford 25 year amortizations but choose 30 years for cash flow flexibility.

By: LS

LS — Mon, 04 Jun 2012 21:25:39 +0000

What about the 92% who never miss a payment?
What about them? Those people have exactly zero effect on the market. The only people that matter are those that are buying or selling.

By: Joe Q.

Joe Q. — Mon, 04 Jun 2012 21:14:12 +0000

Agreed, but it is the down-payment stats that are a bit more troubling.

By: bob

bob — Mon, 04 Jun 2012 14:59:26 +0000

Gosh, Eager Beaver, it is sure nice that we have diligent goal oriented people like you to tell us what we should spend our disposable income on and which hobbies we should and should not adopt. I don’t know how I’ve managed to enjoy life before meeting you.
Do you actually have any information on that 50% who has “never made an attempt to either increase the payment or put a lump sum on”? Are you *really* sure they are just throwing money away on morally depraved ‘habbits’ like drinking coffee, or is it possible they are actually *more* responsible than the lump-sum types? Could it be, in fact, that they have already “built it” extra payments by setting themselves higher monthly payments, choosing bi-weekly payment schedule, or setting a shorter amm. period than the other 50% who initially set themselves lower monthly payments and longer amms. and then, once in a while, put down a lump sum. If you were truly diligent and goal-oriented, I suspect you would favour the higher regular payments than the occasional lump sum.
Or — and I know this must be somewhat shocking to someone as eager as you — could it be that they have made a calculated decision that they actually *like* drinking Tim Hortons coffee and are willing to sacrifice a little bit of disposable income now, knowing that they might have to make a year or two more mortgage payments. That, perhaps, for some people, putting every red cent into a mortgage doesn’t actually make their lives better? I know, I know, crazy talk.
But I’m with you. I refuse to spend money on ‘extras’ like toilet paper so that I can prepay just that much extra every month on my mortgage. How do I do it? It is easy once you learn to time your emissions until you are at work. Nothing worse than developing a habit of literally flushing money down the toilet.

By: bob

bob — Mon, 04 Jun 2012 14:44:59 +0000

I have very little faith in our ability to interpret the choice of amm. based on these data.
When we got our mortgage in 2008, we took a 40 year amm, but set the payments at 25 years. The lender (major bank) at that time told us that they were, essentially, registering ALL mortgages at 40 years and just setting the payments at whatever amm. people actually wanted.
Their reasoning: in many instances clients had applied for shorter amms and been rejected, after which they simply turned around and applied for the longer amm. To save everyone time and money, they just registered everything as long.
Again, this is why I have no faith in the length of amms. as a reflection of *ability* to pay. I suspect that few people with 40 year (or 35 now) actually take that long to pay it off.

By: Joe Q.

Joe Q. — Mon, 04 Jun 2012 13:44:04 +0000

I too find this surprising — and these numbers apparently cover all buyers (not just first-timers) as far as I can tell.

By: emmi

emmi — Mon, 04 Jun 2012 10:47:10 +0000

1200 billion total in mortgage debt
55 billion in principal was paid as part of regular payments
49 billion in equity take out (29 in refi and 26 in HELOC)
If it weren’t for another 18 billion in lump sum and pre-payments, progress against existing mortgage debt would have been negligible.