Homebuyers rush to pay down mortgages

Canadians who have recently bought a home intend to pay off their mortgages as quickly as possible, with many already taking steps towards that goal, according to an annual mortgage consumer survey released Wednesday by Canada Mortgage and Housing Corp.

One-third of recent buyers said they have already made a lump sum payment to help pay down the principal on their mortgage, and 84 per cent said they are making payments on an accelerated basis, which shortens the original amortization period, according to CMHC.

A more conservative attitude towards debt has often been cited for helping buffet Canadian homeowners from the mortgage mess in the United States. The CMHC study shows this caution remains, said Pierre Serré, vice president, insurance products and development, at CMHC.

“The fact that new homeowners are working to pay down principal early and are accelerating payments is a good indication that this responsible behaviour will continue throughout the life of their mortgage,” Mr. Serré said in a statement.

The survey also indicated 84 per cent of respondents felt they had access to suitable housing options, and 88 per cent felt confident they could manage their debt.

The survey is conducted each fall, and based on a sample of more than 1,400 recent active mortgage consumers, including first time and repeat buyers, along with customers renewing and refinancing their mortgages. Results are considered accurate within 2.6 percentage points 19 times out of 20.

(prepared by Lori McLeod/Globe and Mail)