Interest in refinancing is accelerating significantly amid the COVID-19 pandemic, according to comparison site Lowestrates.ca.
“We have seen a huge increase in the number of consumers coming to our site to compare rates and see if they can save money by breaking their current mortgage and renewing early or refinancing,” said Justin Thouin, chief executive of Lowestrates.ca.
The site’s metrics showed that the volume of refinancing inquiries made through the site increased by 326% month-over-month in March, when the coronavirus first took hold of Canadian markets, according to CBC News.
In early June, Statistics Canada said that mortgage borrowing – and overall credit market activity – has grown along with a noticeable decline in debt-servicing costs.
As of the end of Q1, national credit-market debt was at $2.33 trillion, with $1.53 trillion in mortgage balances and $802.1 billion in consumer credit and non-mortgage loans. During the same time frame, the household debt-service ratio (DSR) stood at 14.67%, from the 14.81% in Q4 2019.
“One silver lining in [the latest] report was the decline in debt-servicing costs, with the DSR falling for the first time in more than two years as interest rates fell across a broad range of loans,” said Ksenia Bushmeneva, TD Bank economist. “In addition to lower interest rates, deferrals and other modifications of mortgages and other credit products also helped lower expenses related to debt servicing.”