Amid speculation about a possible rate cut, most Canadians
say it won't change how they manage their current debt
TORONTO, July 14, 2015 /CNW/ - With the possibility that
the Bank of Canada will cut
interest rates tomorrow, a new poll by CIBC (TSX: CM) (NYSE:
CM) taken just days ago finds the vast majority of Canadians
(93 per cent) are unlikely to increase their borrowing if
rates drop. In fact, one-third of Canadians say they would use a
rate cut as an opportunity to accelerate debt repayment, not take
on new obligations.
Highlights of the poll include:
- 93 per cent of Canadians say they are unlikely to borrow
more money if interest rates fall
-
- 60 per cent say lower rates would have no impact on
them
- 33 per cent say they would use lower rates as an
opportunity to accelerate debt repayment
- Only 7 per cent of Canadians say they would consider
borrowing more money if rates were lowered
"With interest rates historically low, and many Canadians
already focused on debt repayment, it's not surprising that a
further rate cut won't cause many Canadians to borrow more," says
Christina Kramer, Executive Vice
President, Retail and Business Banking, CIBC. "For many Canadians,
lower interest rates mean they can accelerate debt repayment by
increasing monthly payments or making lump sum payments."
While a further drop in interest rates might only prompt 7
per cent of all Canadians to consider borrowing more, 12 per
cent of 18 to 34-year olds said they would consider borrowing
more money at lower rates.
"Any change in rates shouldn't be an incentive on its own for
taking on more debt," says Ms. Kramer. "Borrowing should be part of
your overall financial plan, which takes into account what you need
to borrow for and having a plan in place to pay it back."
A recent report from CIBC Deputy Chief Economist, Benjamin Tal, said that a Bank of Canada rate cut is unlikely to help boost the
economy by increasing spending but would cause the loonie to fall
further, potentially making exports more attractive.
KEY POLL FINDINGS
How Canadians would react to an interest rate cut, by
region:
(* indicates sample size too low to report
individually)
|
No impact on me |
An opportunity to
accelerate debt
repayment |
Would consider
borrowing more |
All Canadians |
60% |
33% |
7% |
British Columbia |
59% |
31% |
* |
Alberta |
62% |
31% |
* |
Manitoba & Saskatchewan |
48% |
47% |
* |
Ontario |
59% |
33% |
* |
Quebec |
67% |
29% |
* |
Atlantic Canada |
50% |
42% |
* |
How Canadians would react to an interest rate cut, by
age:
(* indicates sample size too low to report
individually)
|
No impact on me |
An opportunity to
accelerate debt
repayment |
Would consider
borrowing more |
All Canadians |
60% |
33% |
7% |
18-34 |
45% |
43% |
12% |
35-54 |
56% |
37% |
* |
55+ |
76% |
21% |
* |
From July 6th to
7th, 2015, an online survey was conducted among 1,508
randomly selected Canadian adults who are Angus Reid Forum
panelists. The margin of error - which measures sampling
variability - is +/- 2.08 per cent, 19 times out of 20. The results
have been statistically weighted according to education, age,
gender and region (and in Quebec
language) Census data to ensure a sample representative of the
entire adult population of Canada.
Discrepancies in or between totals are due to rounding.
About CIBC
CIBC is a leading Canadian-based global financial institution with
nearly 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 in our
Media Centre on our corporate website at www.cibc.com.
SOURCE CIBC