A study claims first homebuyers are becoming aware of the risks of entering the housing market and are preparing hefty down payments, locking in for longer mortgage terms.
The annual report by the Canadian Association of Accredited Mortgage Professionals (CAAMP) said eight out of 10 borrowers are choosing to get tied with a typical five-year fixed home loan package.
Almost half of the Canadian homebuyers this year come from first-time buyers, amounting to 210,000 borrowers in total. These buyers are able to come up with 21% of the home’s costs, allowing them to avoid Canada Mortgage and Housing Corp.’s insurance.
“It’s a reflection of what it costs to get into the market,” Jim Murphy, president of CAAMP, was quoted in The Star.
CAAMP also saw young people are now coming up with the cash needed for down payments, thanks to gifts or loans from parents or grandparents.