The Mortgage industry in Canada is mainly regulated by the provinces consequencing in a patchwork of licensing requirements. Canada Mortgage have become increasingly complex in the recent years. Presently there are different mortgage products, different features and even differenttechnologies coming into play.
The banks in Canada play a significant role in the canada mortgage market. From estimation it isseen that to the end of the year 2004, Canada’s Banks had $368 billion in outstandingresidential mortgages, which is 62.1% of total mortgage market ($593 billion).
Canada Mortgage and Canada Mortgae Rates
- Variable Rate Mortgage In Canada
The Variable-Rate Mortgage is offered at the prime rate less 0.25%* and is adjusted in every months. That’swhy one can enjoy a discount on the lowest possible rate on the market!
Here generally two paymentoptions are offered: fixed and variable payments.
The fixed payment is based on therate for the minimum 5-year term in effect when the loan is opened.
The variable payment is adjustedmonthly in relation to interest rate movements and in keeping with theremaining amortization.
- Fixed Rate Mortgage In Canada
- Capped Rate Mortgage In Canada
- The variable payment isadjusted monthly in relation to interest rate movements and in keeping with theremaining amortization.
- Money Saver Mortgage In Canada
If the priority is being given on the lower rate Mortgages then money savermortgages are being used. Such type of Mortgage is a 5-year term loan with avariable interest rate based on the 3-month term rate reduced of 0,35 %.
In this case the mortgage rates andmortgage payments are adjusted in every three months according to thefluctuations of the rate in effect.
Fixed-Rate Mortgage is a conventional mortgage type, which you can use to finance up to 75% of the valueof the mortgaged property. To get higher flexibility, you have a choice ofdifferent amortization periods and terms.
The Capped-Rate Mortgage offers a lower and short-term rate along with long-term security.The applicable interest rate is somehow variable and adjusted in every month according to the primerates. However, if rates are up at the time of the next adjustment, you neverpay more than your initial capped rate.
Your capped-rate (maximal rate) is determined according the 5-year term at the signature. You always benefitfrom the best rate: the prime rate or the capped rate.Here the payment optionincludes fixed and variable payments.The fixed payment isbased on the rate for the 5-year term in effect when the loan isopened.
Canada Mortgage and Housing Corporation (CMHC)
It is a Canadian Government Agency. The agency is responsible for the housing industry inCanada. Its main duty is currently to ensure low cost Mortgages available to Canadians by providinginsurance to lenders in case of defaults and homebuyer assistance. Since 1954one in three Canadian home buyers have made use of CMHC's programs.
Mortgage Industry In Canada
The annual survey of Mortgage buyers by Canada Mortgage and Housing Corporation (CMHC)has given a clear picture on the Mortgage industry in Canada.
Presently brokers of Canad mortgage enjoy 26 per cent of the mortgage market share in Canada. TheCMHC survey says the public's perception of mortgage brokers is improvingrapidly. It says 51 per cent of consumers say brokers provide a valuableservice when arranging a mortgage, up from 37 per cent in 2001.
Consumers who have used mortgage brokers in thepast are more positive about their role than consumers who have not. Sixty-sixper cent of previous users say mortgage brokers provide a valuable service,compared to 41 per cent of non-users.
In 2004, only 40 per cent of new mortgagepurchasers and 30 per cent of renewers shopped around for mortgage proposalsfrom different lenders.
Use of mortgage brokers among first-time buyershave also increased, but broker usage among renewers has dropped from 11 percent in 2002 to six per cent in 2004.
The survey states that use of the Internet to getmortgage information has climbed up from 26 per cent in 1999 to 48 percent in2004. However, it says that two-thirds of consumers still consider a personalrelationship an essential part of mortgage negotiations.