Mortgages: Fixed rates are popular

According to an Ipsos Reid poll conducted on behalf of Royal Bank, 42% of Canadians who intend to buy a home in the next two years they intend to opt for a mortgage at a fixed interest rate .

This is an increase of two percentage points compared to last year. The increase ends a four-year decline of intentions to opt for fixed rates, 49% in 2008.

Demand for loans that combine fixed and floating rate is second intentions, with 37%, down four percentage points compared to 2011.

As for variable rate loans, they are the choice of 21% of Canadians, up two percentage points.

“The popularity of fixed rate mortgages had declined in recent years, but the trend reverses. Canadians are now seeking to block their interest rates, which is historically low, “said Claude DeMone Wednesday, General Manager, Funding Strategies for Home Equity, RBC.

“The difference between the fixed interest rates currently low and variable. Consequently, many Canadians are choosing peace of mind by choosing a fixed rate. ”

The survey also revealed that six Canadians who hold a mortgage over 10 say take advantage of interest rates falling to repay principal on their mortgage, which represents an increase of five percentage points over last year .

Finally, 55% of mortgage holders do not believe that increases in interest rates would lead to their financial difficulties. Last year, 49% of Canadians felt that way.

The survey also revealed that over half of Canadians who contracted a loan to buy a house chose their lender based on “best rates” offered, while four in ten borrowers have preferred loyalty and trust in their lender.

For 33% of respondents, convenience was an important consideration in choosing their financial institution.

The 19th annual survey of trends in the housing market, RBC was conducted online from 24 to 30 January.

Posted in Financial News