Getting advice on your personal financial situation is the key to making
the right mortgage decision for the long term
TORONTO, June 2, 2011 /CNW/ - Canadians are split in their views on
whether a fixed rate or variable rate mortgage is the right way to go
in the current rate environment, even as they anticipate higher
interest rates over the next year, according to a recent CIBC/Harris
Key findings of the poll include:
39 per cent of respondents said they would choose a fixed mortgage if they had to
choose between a fixed or variable mortgage today.
32 per cent said they would choose a variable rate mortgage.
One-quarter (25 per cent) were undecided as to which would be the better choice.
61 per cent of respondents believe interest rates will be higher a year from now,
while 24 per cent believe that rates will remain the same over the next 12 months.
Only 3 per cent of respondents believe rates will be lower a year from now than they
"The divergent opinions on whether to go fixed or variable underscores
what our advisors see everyday in their meetings with clients -
choosing the right mortgage depends on your personal financial
situation, and there's no single answer for everyone," commented
Colette Delaney, Senior Vice President, Mortgages, Lending & Insurance,
CIBC Retail Markets.
While the poll revealed that Canadians believe rates are likely to
increase in the next 12 months, Ms. Delaney advised homeowners to
consider additional factors beyond interest rate predictions when
making mortgage decisions. "You need to approach the fixed versus
variable decision from the inside out, starting with your personal
financial goals and working from there," added Ms. Delaney. "Your
mortgage is a major part of your overall financial plan, and your
decisions should be based on how your mortgage fits with your long term
financial goals, not on short term rate fluctuations."
The poll results also highlight that views on choosing a fixed or
variable mortgage can change depending on your stage of life. For
Among 25-34 year olds, who are more likely to be first time buyers or
new homeowners, only 27 per cent would choose a variable mortgage
That climbs to 42 per cent among respondents 45-54 years of age, who are more likely to be near
the end of their mortgage and have greater tolerance for rate changes
within their mortgage payment
Ms. Delaney noted that homeowners can look at both a fixed and variable
strategy over the life of their mortgage. "For most people, your
mortgage is a long term proposition, so your strategy should look
beyond your first term," commented Ms. Delaney. "You may choose to
start with a fixed mortgage when you buy your first home, then
transition to a variable mortgage in later terms when you have improved
your financial situation and paid down some of the principal."
While homebuyers this Spring will need to make the fixed vs variable
decision when they buy a new home, Ms. Delaney also encouraged existing
mortgage holders to take a fresh look at their mortgage and evaluate
their options to help reduce their balance faster.
CIBC has a mortgage offer for existing mortgage holders who may be in a
closed mortgage with another financial institution and who want to
consider switching their mortgage as part of their long term strategy
to reduce the total interest they pay. The CIBC Mortgage Switch offer
includes cash back up front to help mitigate the cost of moving a
mortgage before it is up for renewal, and a competitive fixed or
variable rate to help homeowners take advantage of today's low rates
and pay down their mortgage sooner.
Each week, Harris/Decima interviews just over 1000 Canadians through
teleVox, the company's national telephone omnibus survey. These data
were gathered between April 28 and May 1, 2011. A sample of this size
has a margin of error of 3.1%, 19 times out of 20.
CIBC (CM: TSX;NYSE) 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.
For further information:
Kevin Dove Senior Director, External Communications and Media Relations, 416-980-8835 or Kevin.firstname.lastname@example.org