Most Canadians exercise caution and financial prudence in financing their homes, according to a study by a major mortgage broker in Canada.

A June 2005 online study of more than 600 Canadian borrowers by Mortgage Intelligence, a GMAC company, found that 95 percent have financed primary residences, with 69 percent choosing fixed-rate mortgages over variable-rate mortgages,

The survey, conducted by Millward Brown, also found that 48 percent of primary mortgages held in Canada are under $100,000.

Nearly 50 percent of Canadians took advantage of their prepayment options, choosing to make lump sum payments or increase payment amounts, the study said.

“These findings certainly paint Canadians in a positive light when it comes to fiscal responsibility,” said Karl Wondrak, President, Mortgage Intelligence, in a statement.

“Most Canadians are unlikely to overextend themselves when it comes to buying a home. Peace of mind plays a major role in the purchase, as indicated by the preference for fixed-rate mortgages. Although most lock in for a five-year term, longer terms of 10, 15, 20, and 25 years are increasing in popularity,” Wondrak said.

Low- or no-down programs have proven attractive to Canadians, with 16 percent placing five percent or less down on their homes – the highest percentage was found in Quebec at 20.5 percent, the study said. Thirty-eight percent of Canadians placed 5 percent to 15 percent down on their homes, according to the study.

“Given rising housing values, the ability to purchase a home with less than five percent down has been a tremendous boon to many young buyers,” said Wondrak.

“In the past, the ability to amass a down payment proved to be a substantial obstacle for many first-time purchasers, despite the fact that they more than qualified in terms of carrying monthly mortgage payments. Today, these homeowners are gaining equity on their homes at a rate that can outpace their ability to save five percent down.”

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