CIBC has recently conducted a study that shows more Canadians are leaning towards fixed-rate mortgages over variable rates. The study was done between March 8 and March 12 and surveyed 1,003 Canadians, asking them which rate they would choose. The same study was done last year and the results show that more Canadians are choosing fixed rather than variable now than they were before. The survey shows that half of Canadians would now choose the fixed rate, and outside data shows the number may be even higher than that.
It’s the CIBC survey that shows 50% of the Canadians polled would opt for the fixed rate mortgage today, which is up from the 39% that were surveyed last year. It’s not surprising, seeing as the longer interest rates are held as low as they are, the more people will choose fixed over variable. It should also be mentioned that the study was conducted shortly after BMO announced on March 7 that they were starting the second mortgage war of the year, slashing rates on their 5-year fixed-rate mortgages – a time when many Canadians jumped ship to the fixed rate. The percentage from the survey is also in line with a survey BMO released just a couple of weeks ago, which showed even higher results.
The recently conducted CIBC survey also shows that 32% of Canadians would still choose the variable rate – the same percentage that showed they would last year. This may not be entirely accurate however, as other lenders have reported as little as 15% of their lenders are now choosing the variable rate. The difference may be because some borrowers take things like home equity lines of credit into consideration, while lenders may be referring strictly to first mortgages.
Of those surveyed in the CIBC poll, only 18% of Canadians said that they still weren’t sure which type of rate they would choose. While that number may seem high, it’s well below the 30% who said the same thing last year, and shows that Canadians’ knowledge of mortgages is going up. Some reasons given for our mortgage know-how going up are the number of resources and information that’s available online, our increased use of mortgage brokers instead of relying only on banks to provide us with information, and maybe most notably, the fact that the choice between choosing between a variable or a fixed rate mortgage has never been more clear.
