CIBC Mortgage Poll: Fixed or Variable? Half of all Canadians say they would choose a fixed rate mortgage today

News provided by

Mar 26, 2012, 06:00 ET

More Canadians looking to lock in amidst lower rates - getting advice on your personal financial situation is the key to making the right mortgage decision for the long term

TORONTO, March 26, 2012 /PRNewswire/ - A new CIBC (CM: TSX; NYSE) Poll conducted by Harris/Decima reveals half of all Canadians said they would choose a fixed rate mortgage if they had to decide today, a notable increase over last year. Canadians also expect mortgage rates to be higher over the next 12 months. These poll findings suggest more Canadians are looking to lock in at today's low fixed rates as part of a strategy to pay their mortgage down faster.

Highlights of the poll include:

50 per cent of Canadians said they would choose a fixed rate mortgage today, compared to only 39 per cent last year
32 per cent of Canadians said they would choose a variable rate mortgage today, the same percentage as last year
Another 18 per cent said they were uncertain which mortgage would be right for them, considerably lower than the 30 per cent who were undecided in 2011
86 per cent of Canadians believe mortgage rates will either stay the same or be higher 12 months from now
Only 6 per cent of Canadians believe mortgage rates will be lower 12 months from now

"The fixed or variable question is one of the biggest considerations for new homebuyers and for those holding an existing mortgage, and the low rate environment this year is one more factor Canadians will need to consider as they choose the mortgage that is right for them," commented Colette Delaney, Executive Vice President of Mortgage, Lending, Insurance and Deposit Products, CIBC.

A comparison of these poll findings to those from 2011 indicates the increased interest in fixed mortgages may have come mainly from those who were previously undecided as to which mortgage they would choose, while the percentage of Canadians pursuing a variable strategy has remained constant. Fixed rate mortgages have traditionally been popular among first time buyers, looking for certainty in their payments as they establish themselves financially. However this year's poll shows a fairly constant demand for fixed mortgages across age groups. Regionally, Atlantic Canadians were among those most likely to choose a fixed rate mortgage

One issue Canadians were certain of was the prospect of increasing rates. Nationally, 86 per cent said mortgage rates would either be the same or higher one year from now, a similar finding to last year's poll results. "While it's not possible to predict future interest rate changes, it is encouraging to see that the vast majority of Canadians have considered rate increases as part of their mortgage strategy," added Ms. Delaney.

In a poll released by CIBC in January 2012, Canadians identified paying down debt as their number one financial priority for 2012, and Ms. Delaney notes that low mortgage rates can help Canadians to accelerate their debt repayment. "With debt repayment a top priority for Canadians, and with rates near historic lows, many Canadians have an opportunity to reach their goal of being debt free sooner."

To further accelerate debt repayment, one strategy offered by CIBC is to set your mortgage payment at the amount it would be if rates were one to two per cent higher. Not only does this help to reduce the principal amount owing, but it also prepares Canadians for future rate increases.

Ms. Delaney added that choosing the right mortgage depends on your personal financial situation, and there's no single answer for everyone. "It is important to view your mortgage as one component of your overall financial plan, which means you can't choose a mortgage purely on rate" added Ms. Delaney. "The flexibility to make extra payments, your overall interest costs, and amortization all have an impact on your overall financial plan, and you should get advice on your total financial picture when choosing the mortgage that's right for you."

Additional Special Mortgage Offers from CIBC

Taking broader financial needs into account, CIBC has developed mortgage offers aimed at helping Canadians reach their financial goals, including paying down their mortgage. In addition to competitive mortgage rates, CIBC also has offers to help Canadians build their savings, or reevaluate their current mortgage even if it's not yet up for renewal.

For example, the CIBC Mortgage Switch Offer combines a great mortgage rate with 2% cash back up front. The cash back can be used to help offset prepayment charges clients might incur when transferring their current mortgage at another financial institution before their renewal date to take advantage of a lower rate.
Canadians looking to build their savings while paying down their mortgage may find the CIBC Wealth Builder option for mortgages makes sense for them. This offer combines a competitive mortgage rate on a 5-year fixed or variable mortgage with regular cash back payments made to a CIBC savings account to help Canadians build a regular savings plan while paying down their mortgage.

Given the number of mortgage options available to Canadians, it's important to sit down with an advisor who can help review your overall financial picture to ensure you choose the mortgage that best meets your needs. In addition to Advisors at CIBC branches, CIBC's Mobile Mortgage Advisors make it easier than ever to get mortgage advice anytime, anywhere by meeting Canadians at a time and place that works for them.

"There's never been a better time to get advice about your mortgage and your overall financial goals, given today's lower rates," added Ms. Delaney.

KEY POLL FINDINGS

Percentage of Canadians who would choose a fixed rate mortgage if they were to acquire, refinance or renew a mortgage today, by region:

	2012	2011
National	50%	39%
Atlantic Canada	63%	43%
Quebec	51%	45%
Ontario	49%	35%
Manitoba and Saskatchewan	46%	33%
Alberta	49%	36%
British Columbia	48%	38%

Percentage of Canadians who would choose a variable rate mortgage if they were to acquire, refinance or renew a mortgage today, by region:

	2012	2011
National	32%	32%
Atlantic Canada	25%	23%
Quebec	37%	31%
Ontario	31%	33%
Manitoba and Saskatchewan	37%	31%
Alberta	32%	35%
British Columbia	27%	31%

Percentage of Canadians who believe mortgage rates will be the same or higher 12 months from now, by region:

	2012	2011
National	86%	85%
Atlantic Canada	88%	83%
Quebec	88%	82%
Ontario	86%	87%
Manitoba and Saskatchewan	87%	77%
Alberta	90%	84%
British Columbia	79%	88%

Percentage of Canadians who believe mortgage rates will be lower 12 months from now, by region:

	2012	2011
National	6%	3%
Atlantic Canada	5%	6%
Quebec	6%	2%
Ontario	6%	2%
Manitoba and Saskatchewan	8%	6%
Alberta	3%	4%
British Columbia	6%	2%

*Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered in a sample of 1,003 Canadians between March 8 - 12, 2012. A sample of this size has a National margin of error of +/-3.1%, 19 times out of 20

CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at www.cibc.com.

SOURCE CIBC