A new report suggesting Canadians have an average of 15 years left on their mortgage may support broker concerns that the move to tighten mortgage rules was unnecessary.
The survey, released Wedjnesday by the Bank of Montreal, shows Canadian homeowners have made some headway in becoming debt free, having amassed significant home equity to weather any coming storm.
The research also comes less than a week before the Flaherty’s new mortgage rules take effect.
While the survey shows an average of 15 years left on a typical Canadian mortgage, it doesn’t specify the age of respondents or the average equity amounts.
Brokers are concerned the mortgage regulation may be out of sync with the realities of the market. The survey adds weight to their assertion Canadians are already acting responsibly in terms of managing housing debt.
BMO is nonetheless supportive of the government move to lower the maximum amortization to 25 years for insured mortgages.
According to Laura Parsons, a mortgage specialist with BMO, the average mortgage timeline will likely decrease as a result of 25 year amortization, which comes into effect on July 9.
Parsons also said the lowering of the refinancing limit to 80 per cent of home equity - as included in the new measures - may also encourage some owners to pay down their mortgage faster to increase refinancing options later.