Canadian homebuyers are increasingly choosing longer amortization periods for their mortgages, according to a survey.
The annual fall survey by the Canadian Association of Accredited Mortgage Professionals also showed that more homeowners are using the equity in their homes to refinance debt.
One of the biggest changes in the Canadian housing market has been the move to amortizations longer than 25 years. In the past year, 50% of all new mortgages were for terms of up to 35 years, the longest now available in Canada.
This compares to 37% of all new mortgages last year and brings the total of outstanding mortgages with terms longer than 25 years to 16%, compared to 9% last year.
Jim Murphy, the trade group's president, said he expects the 35-year mortgage to become the norm in Canada, driven mainly by affordability issues as home prices have risen significantly in the past 10 years.
The survey showed that 22% of homeowners took equity out of their homes in the past year, up from 17% a year earlier.