The refi may not be dead after all, according to a new consumer report, suggesting more than 10 per cent of homeowners have recently taken out an average of $57,000 in home equity – that despite tougher mortgage rules stymieing broker efforts.
“Those who took out equity were asked what they used the money for,” reads the report, “Annual State of the Residential Mortgage Market in Canada,” prepared by economist Will Dunning for CAAMP. “Some people indicated more than one purpose.”
Still a chief driver propelling some 11 per cent of Canadian homeowners to take out that equity appears to have been debt consolidation.
That translates into $16.6 billion, or 28 per cent, of the money taken out over the last 12 months.
Another $12.3 billion, or 21 per cent, was earmarked for renovation or home repair, with another $9.7 billion (16 per cent going directly into purchase, including bankrolling education.
The CAAMP report does not provide corresponding data from previous years, making it hard to track the relative strength or weakness of this year’s refi business.
Regardless, brokers continue to grapple with the challenge of winning refis given the pullback following the July 2012 mortgage rule changes.
Still there’s some suggestion that homeowners are steaming ahead with refis despite that 80 per cent LTV ceiling.