A new report suggests that Canadian homeowners are paying down their mortgages faster than they’re being given credit for.
CIBC Deputy Chief Economist Benjamin Tal says homeowners are taking advantage of record-low interest rates to accelerate their mortgage payments, and shorten their amortization periods.
The CIBC World Markets study says that homeowners are paying an additional $11 billion a year in principal that isn’t being officially recognized by the Bank of Canada.
It suggests that an estimated 30-40% of households with mortgages are accelerating their payments. As well, 40-50% of borrowers are estimated to have amortization periods of less than 20 years, rather than the standard 25 years.
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