"Even though we've had a relatively stable rate environment for a number of years, Canadians are being prudent when it comes to mortgage planning and are factoring in the possibility of higher rates in the near future," Barry Gollom, vice-president, secured lending and product olicy at CIBC said in an official relase. "With fixed rates near historic lows, Canadians see an opportunity to lock in for a number of years in order to reduce the risk of expected higher interest costs."
CIBC conducted a Nielsen Consumer Insights survey of 1,005 Canadians between February 6-10. The survey found that 48 per cent of Canadians would choose a fixed rate mortgage if they had to make the decision today, compared to 31 per cent who would choose variable. 19 per cent were undecided.
"For those that have recently taken out a mortgage, and may have additional expenses or hold other debt, the predictability of a fixed mortgage rate may be more appealing," Gollom said. "However those who have paid off a sizeable portion of their mortgage are likely less sensitive to rate changes."
The survey also found that 47 per cent of Canadians believe rates will increase in the next 12 months, up from 38 per cent from last year.
"The poll also revealed that younger Canadians were even more likely to choose a fixed mortgage, with 56 per cent of Canadians aged 25-34 saying they would lock in to a fixed rate today, a number that has been steadily increasing over the last four years,” the release states. “In contrast, more established homeowners (aged 45-54) were among those less likely to lean towards a fixed rate (43 percent).”
Brokers may be touting the advantages of variable-rate mortgages but more and more Canadians believe fixed-rate options are preferable in the current environment.