There was a poll done by CIBC several weeks ago that looked at whether Canadians were choosing fixed rate mortgages or variable rate mortgages. That survey showed that 50% of Canadians choose the former over the latter and now, RBC has taken their own poll to confirm those findings.
The RBC Home Ownership poll showed that 42% of homebuyers currently think that they’re going to choose a fixed rate in order to take full advantage of the low interest rates that are available today, and that we know from Mark Carney, will probably be going up in the next little while. That percentage is smaller than the number found by CIBC, but RBC also says it’s the first time in four years that fixed rates have been the option of choice for Canadians. Only 21% of those surveyed said that they would still choose a variable rate.
Claude DeMone, director of strategy for home equity financing in the way of HELOCs and home equity loans, two loans that have two different kinds of interest rates, said in a statement along with the poll results, “The popularity of fixed-rate mortgages had been declining over the past few years, but the trend is shifting. Canadians are now looking to lock in at historically low interest rates. What you’re currently seeing is a small margin of difference between fixed and variable interest rate offers, so many Canadians are opting for the peace of mind that comes with a fixed rate.”
The poll also found that homeowners are taking advantage of the low rates in order to pay off more of their principal. This number was up to 62%, compared with the 57% of homeowners that said the same thing last year. Also up is the number of people that think they’ll be able to handle a mortgage rate change. This last poll showed that 55% believe their financial situation would not change with an interest rate hike, up from the 49% that thought the same thing last year.
However, DeMone also warns homebuyers that “There is more to a mortgage than simply a low interest rate. Homewoners should make sure their mortgage fits in with their overall financial plan and provides maximum payment flexibility. Life happens and when it does, you want to be able to nimble and adjust as easily as possible.”
