Right time for fixed mortgages: poll

Canadians are still leaning towards fixed-rate mortgages, finds a new CIBC poll.

This marks the third consecutive year they’ve chosen fixed over variable-rate mortgage solutions. Overall, almost half (45%) would choose a fixed-rate option, while only 26% would explore other products.

Read: Mortgage repayment is possible: CIBC

The poll says fixed rates are most popular among 25-to-34 year olds, with 54% stating they prefer the predictability offered. This is especially crucial for first time homebuyers.

The poll also finds Canadians’ expectations for interest rates have changed over the last couple years, with more people (46%) now predicting today’s rates will remain in place over the next year. Two years ago, only 24% believed rates would remain low.

This trend suggests Canadians could face challenges in the future if they don’t consider interest rate changes as part of their long-term payment strategies.

Read: Help young clients buy homes

“[People] are growing accustomed to low rates we’re experiencing,” says Colette Delaney, executive vice president of Mortgage, Lending, Insurance and Deposit Products at CIBC.

So, she stresses they need to remember to plan ahead for their next mortgage term, as well as consider the impact higher rates would have on your budget. Read: Help clients through the mortgage process

This year’s poll also saw an increase in the number of Canadians who remain uncertain about which type of mortgages benefit them most.

To further accelerate their debt repayment and protect their wealth, your clients can set mortgage payments at the amount they would be if rates were 1%-to-2% higher. They should also consider amortization, their extra payment flexibility, and whether or not they have other debt when making any mortgage choices.

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