Record-low rates have contributed to a decrease in Canadians choosing to accelerate their mortgage payments, according to a CIBC poll released Monday, though the bank suggests taking the opportunity to take advantage and pay them down quicker.
"A mortgage is the largest debt most Canadians will take on in their lifetime, and being mortgage-free is an important goal for many," Barry Gollom, vice president of secured lending and product policy for CIBC said in an official release. "With current low interest rates, this may be an opportune time to make progress against your mortgage - even a few small changes can make a big difference in the length of time it takes to pay off your mortgage and the amount you pay in interest charges."
According to the poll – which surveyed 1,509 randomly selected participants -- 55 per cent of Canadians who currently have a mortgage are taking actions to repay them faster, down from 68 per cent in a similar poll from 2013. 23 per cent accelerated their payment frequency (down from 42 per cent); 28 per cent increased the payment amount (down from 30 per cent); 18 per cent made lump sum payments (down from 15 per cent).
The average age Canadians expect to be mortgage free ticked up on year to 58 in this year’s poll.
"With mortgage rates remaining relatively stable and at historic lows for the last few years, some Canadians may not be as focused on paying down their mortgages as when interest rates are higher," Gollom said. "Generally, paying off debt as quickly as possible is a smart decision, but you do need to ensure you're not focusing on your mortgage at the expense of your other financial plans, or by increasing debt elsewhere."