Combination mortgages are rising in popularity among Canadians, with 40 per cent of those polled in RBC's 17th Annual Homeowners Survey saying if they were to purchase a home within the next couple of years, they would plan on taking out a combination mortgage, higher than the 32 per cent in 2009 who opted for combination mortgages.
The growing popularity of combination mortgages, which offer both fixed and floating rate segments, clearly shows that Canadians are trying to take advantage of low interest rates and retain security of a fixed mortgage at the same time.
"Although interest rates are expected to rise, our study shows that not all Canadians intend to automatically opt for a fixed mortgage with a longer term," said Marcia Moffat, head, Home Equity Financing, RBC Royal Bank. "As consumers begin to learn about the benefits of mortgage diversification, we're seeing more homebuyers gain a better comfort level with adding floating rate mortgage options."
According to the poll, fixed-rate mortgages continue to be a common choice for Canadians and are favoured by 44 per cent of potential buyers likely to buy a home within the next two years. In Atlantic Canada, 54 per cent are likely to choose a fixed rate, while 41 per cent of Ontarians are least likely to do so.
Current homeowners were asked about the impact of potential interest rate hikes and 66 per cent said they were concerned, with women being 70 per cent more concerned than then 60 per cent of men asked.