A new survey finds Canadians not banking on further rate cuts
and are electing to lock in the benefits of a fixed-rate
mortgage
TORONTO, March 30, 2015 /CNW/ - As the spring home-buying
season approaches, a new CIBC (TSX: CM) (NYSE: CM) poll,
conducted by Nielsen, finds that 57 per cent of Canadians
are opting to lock in their monthly mortgage payments at today's
historically low interest rates. That's up sharply from 48 per cent
in 2014 and just 39 per cent in 2011.
Highlights of the poll include:
- 57 per cent of Canadians would choose a fixed-rate
mortgage if they were to acquire, refinance or renew a mortgage
today
- 30 per cent would pick a variable-rate mortgage
- 11 per cent were undecided between fixed and variable,
down from 19 per cent in 2014 and 25 per cent in 2011
- 44 per cent expect higher mortgage rates next year, down
from 47 per cent last year and 61 per cent in 2011
- 42 per cent expect rates to stay the same in the next 12
months
- 9 per cent believe rates will be lower in the next 12
months
"The poll results confirm what many of our
clients are telling us, that they don't expect rates to go any
lower and, in today's housing market, they want the comfort and
security of knowing exactly what their mortgage payments will be
for the next four or five years," says Barry Gollom, Vice President at CIBC. "With the
high cost of housing, there is definitely a strong case to be made
for the predictability and financial peace-of-mind that a
fixed-rate mortgage can provide."
Choosing the right mortgage
As a growing number of Canadians see fixed-rate mortgages as the
best choice for them, Canadians are more decisive about the type of
mortgage they would choose today. Only 11 per cent are undecided in
2015, compared to 25 per cent in 2011.
Meanwhile, the number of Canadians selecting variable-rate
mortgages has held steady around 30 per cent over the last five
years.
Whether buying, refinancing or renewing a mortgage, Canadians
need to think beyond rates when making a decision on a
mortgage.
"While rates tend to factor heavily into your decision whether
to go fixed or variable, it's extremely important to make the
decision based on your own financial situation and how well you're
able to juggle making your monthly payment, paying household
expenses and saving for your retirement or your children's
education," says Mr. Gollom. "There are multiple factors that you
should consider with your financial advisor. You want to be able to
sleep at night and not worry that you won't be able to make your
monthly payments."
Today's low-rate environment is an opportunity
Today's low-rate environment is an opportunity for first-time
homebuyers or those looking to refinance, says Mr. Gollom.
"Homeowners have a rare chance to lock in at historically low
rates," he says. "Many people may also be able to use this as an
opportunity to make extra payments over that time so that they can
pay off their mortgage sooner."
KEY POLL FINDINGS
Percentage of Canadians who would choose a fixed rate mortgage
today, by region:
| |
2015 |
2014 |
2013 |
2012 |
2011 |
| National |
57% |
48% |
45% |
50% |
39% |
| Atlantic Canada |
59% |
50% |
37% |
63% |
43% |
| Quebec |
58% |
48% |
45% |
51% |
45% |
| Ontario |
55% |
48% |
41% |
49% |
35% |
Manitoba
and Saskatchewan |
55% |
47% |
64% |
46% |
33% |
| Alberta |
58% |
42% |
47% |
49% |
36% |
| British Columbia |
58% |
51% |
49% |
48% |
38% |
Percentage of Canadians who would choose a variable
mortgage:
| |
2015 |
2014 |
2013 |
2012 |
2011 |
| National |
30% |
31% |
26% |
32% |
32% |
Percentage of Canadians undecided about choosing a fixed or
variable rate mortgage:
| |
2015 |
2014 |
2013 |
2012 |
2011 |
| National |
11% |
19% |
25% |
16% |
25% |
Percentage of Canadians who believe mortgage rates will be
higher 12 months from now, by region:
| |
2015 |
2014 |
2013 |
2012 |
2011 |
| National |
44% |
47% |
38% |
44% |
61% |
| Atlantic Canada |
51% |
44% |
42% |
56% |
64% |
| Quebec |
36% |
32% |
33% |
39% |
54% |
| Ontario |
51% |
51% |
39% |
44% |
66% |
| Manitoba and Saskatchewan |
53% |
49% |
46% |
48% |
54% |
| Alberta |
40% |
56% |
38% |
50% |
57% |
| British Columbia |
35% |
56% |
40% |
38% |
63% |
Percentage of Canadians who believe mortgage rates will be
higher 12 months from now, by age:
| |
2015 |
2014 |
2013 |
2012 |
2011 |
| National |
44% |
47% |
38% |
44% |
61% |
| 18-24 |
53% |
49% |
41% |
50% |
65% |
| 25-34 |
46% |
49% |
41% |
48% |
60% |
| 35-44 |
45% |
55% |
35% |
40% |
60% |
| 45-54 |
40% |
43% |
36% |
42% |
63% |
| 55-64 |
34% |
42% |
40% |
47% |
60% |
| 65+ |
49% |
42% |
37% |
42% |
57% |
Each week, Nielsen Consumer Insights interviews just over
1000 Canadians through teleVox, the company's national telephone
omnibus survey. These data were gathered in a sample of 1,015
Canadians between March 5-8, 2015. A
sample of this size has a margin of error of +/-3.1%, 19 times
out of 20. Some sample sizes for regional and age groups under Key
Findings are smaller than typically reported and provided only as
reference data.
About CIBC
CIBC is a leading Canadian-based global financial institution
with 11 million personal banking and business clients. Through our
three major business units - Retail and Business Banking, Wealth
Management and Wholesale Banking - CIBC offers a full range of
products and services through its comprehensive electronic banking
network, branches and offices across Canada with offices in the United States and around the world. You
can find other news releases and information about CIBC on our
corporate website at www.cibc.com/ca/media-centre/.
SOURCE CIBC