Fixed Versus Variable Rate Debate Continues
“61% Of Canadians Believe Interest Rates Are Going Up”
According to a recent survey by CIBC, over 60% of respondents said they thought interest rates were going to increase in the next year.
But of those surveyed, only 39% said they would choose a fixed rate at this time.
Here’s a link to the full article from the Financial Post … http://www.nationalpost.com/Prospect+higher+rates+hasn+people+flocking+lock/4880972/story.html
This underlies the ongoing debate over fixed versus variable rates that we have with clients every day.
From a “what should I do” point of view, there is really no right answer. There are good arguments for both, even in a rising rate environment.
The statistics do show that a high percentage of Canadians have been conditioned now to variable rates as staying variable has netted some considerable savings over the last number of years.
And many people have stayed variable during times of rate increases or projected rate increases, only to see interest rates settle down or even fall, further benefiting from their variable rate position.
But there is no guarantee that such good fortune will continue sticking with variable rates.
With all that’s going on in the global financial markets, its not beyond imagination that rates increase and then stabilize at a higher level which would make fixed interest rates very attractive right now.
It’s all about who’s crystal ball is more accurate over time.
And it would appear from some of the statistics out there, such as the CIBC report mentioned above, that there is a good portion of the population that’s going to stay variable until it doesn’t make any sense for them, or they can’t afford the financial risk of rates going any higher.
Added to everyone’s personal assessment of fixed versus variable is the fact that fixed rates have recently been coming down why variable rates have remained unchanged, creating an even greater rationale to go variable at the present time.
Once again, a big part of anyone’s final decision on rate structure is going to relate to their own situation, personal assessment and tolerance for risk, and long term financial plan.
To get more information on mortgage interest rates and what might make the most sense for you and your family, give us a call so we can assess your situation and get all your questions answered.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel