Proving they are more prudent than many so-called experts believe, Canadians took proactive steps during the economic downturn to secure their mortgages.

A survey of mortgage holders by TNS Canadian Facts shows 10% made extra payments to reduce the principal amount, 13% negotiated for better payment terms and 5% switched from a fixed-rate to a variable-rate mortgage to lower monthly payments.

“Home mortgages have … been impacted (by the economy) as Canadians have tried to trim their spending,” says Brook Tyler, research director of TNS Canadian Facts.

“Among Canadians with a mortgage on their principal residence, 42% have attempted to make cutbacks on their mortgage.

“However, the worst appears to be over. Currently, only about one in five mortgage holders report that they are still hoping to make further cuts in their mortgages.”

The report suggests some of this behaviour may have been fuelled by anxiety, as 12% of survey respondents mention being worried about missing a mortgage payment and 4% purchased mortgage insurance.

However, only 4% report having actually missed a payment.

Intentions to buy a new home or condominium rose to 14% nationally, up from 11% last September, although a great deal of that demand has not been satisfied, as 64% of those who were planning to buy six months ago have yet to do so, likely because they are watching the economy closely, says Tyler.

“One of the consequences of the prolonged economic downturn is that many consumers have been taking a ‘wait and see’ approach to the housing market,” he says. “Attractive interest rates, coupled with a more sanguine view of the economy, suggest that consumers are more than ready to act. Indeed, 12% of Canadian renters report that they are more likely to take out a mortgage in the near future to take advantage of current rates and more than one in five mortgage holders are planning to renew early or renegotiate to take advantage of current rates.

“As the economy regains strength, potential mortgage customers will want the assurance that they are not overextending themselves and that their financial institution is willing to provide support in the way of sound financial advice.”

TNS acknowledges its survey was conducted prior to new downpayment and mortgage qualification regulations that took effect April 19, as well as before some of the major banks announced increases in mortgage rates. And while Tyler believes the regulations should have a mild dampening effect on the market, the prospect of further interest rate hikes will likely motivate apprehensive buyers to act.

“In spite of some softness in April, consumer confidence has risen considerably over the quarter and is now higher than it has been since the downturn began in the fall of 2008,” says Tyler. “It is encouraging to note that a number of Canadians are thinking seriously about getting into the real estate market.”

And doing so wisely.

By MYKE THOMAS, SUNMEDIA