Are Canadians Divided on Fixed vs Variable Rate Mortgages?
Matrix Mortgage Global – Canadians Divided on Fixed vs Variable Rate Mortgages According to Poll
A recent poll by CIBC showed that Canadians are split on whether they would select a variable rate mortgage or a fixed one if they were getting a new mortgage today. Although 72% of those polled said they thought interest rates would continue to rise, only 54% said they would definitely choose a mortgage with a fixed rate while 19% said they would opt for a variable rate and 26% were undecided.
These findings are inconsistent with another question in the survey in which 83% of Canadians said that when it comes to their finances, they prefer stability to risk.
So what is making variable rate mortgages appealing to more Canadians? It’s the rates – even though variable rate mortgages can be volatile, they still usually have lower interest rates. Of those surveyed, 60% said that getting the best rates was their only consideration.
But while rates are important, there are other factors that should be considered as well. For those who can handle some ups and downs in interest rates, variable rate mortgages can be a good way to go. If however, you have a large balance still owing on your mortgage or if you have other debts that are tied to your mortgage, then choosing a fixed rate may be more appropriate.
The average Canadian mortgage amount is $170,000. (This number jumps to $252,000 for households that earn more than $100,000 per year).
Fixed or Variable – What Should You Choose?
While it can be tempting to only look at interest rates when you choose a mortgage, it is always best to consult with a professional mortgage advisor to determine what type of mortgage is best for you.
Things to consider are:
- How much money you have left owing on your mortgage (the less money you owe, the more a variable rate may make sense).
- How much other debt you have and how comfortable you are with the payments (if you can’t handle a lot of volatility, then a fixed rate mortgage may be your best choice.)
- Do you have an emergency fund to help with unexpected costs?
When applying for a mortgage it is important to know what you are getting so that you can get the terms that work best for your situation. If you would like help in determining what the best kind of mortgage is for you, then contact the team at Matrix Mortgage Global today at 1-877-597-2605.