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CIBC Poll - Canadians don't expect to be mortgage free until age 57


CIBC Poll - Canadians don't expect to be mortgage free until age 57

Non-mortgage debt a key obstacle to becoming mortgage free

TORONTO, April 5, 2013 /CNW/ - A new CIBC (TSX: CM) (NYSE: CM) poll reveals that Canadian homeowners with a mortgage now believe they will be age 57 on average before paying their mortgage off, compared to age 55 in a similar CIBC poll conducted in 2012. The poll also reveals that while Canadians are taking some positive steps to accelerate mortgage repayment, it is their non-mortgage debt that may be the biggest factor in how quickly they can become mortgage free.

Key poll findings include:


    --  The average age at which Canadian homeowners with a mortgage
        believe they will be mortgage free is 57, compared to age 55 in
        a similar CIBC poll one year ago
    --  Residents of BC had among the longest repayment expectations in
        Canada at age 59
    --  50 per cent of Canadian homeowners say their non-mortgage debt
        (credit cards, lines of credit, etc) has increased since they
        first took on their mortgage. These Canadians were also less
        likely to be making lump sum payments to their mortgage, citing
        a lack of funds as the primary reason.

"Being mortgage free sooner can help accelerate retirement savings, but 
carrying a mortgage into your late 50s can have the opposite effect and make 
it more challenging to reach your long term savings goals," said Colette 
Delaney, Executive Vice-President of Mortgage, Lending, Insurance and Deposit 
Products, CIBC. "If your other debts are heading up, your chances to pay off 
your mortgage sooner are going down, and that's why you need a clear plan that 
takes into account debt management, mortgage repayment, and long term savings."

Other Debts Hamper Mortgage Repayment

Among homeowners who say they've taken on additional non-mortgage debt since 
they purchased their home, only 11 per cent said they had made an extra 
mortgage payment in the last year - considerably lower than the 19 per cent 
who were making lump sum payments among those who had not added to their 
non-mortgage debt. The primary reason noted by Canadians who were not taking 
steps to repay their mortgage faster was that they simply did not have the 
extra funds.

"Today's low rates are a great opportunity for Canadians to drive their 
mortgage balance down, but the advantage is lost if those extra funds need to 
go towards repaying higher interest debt instead," noted Ms. Delaney.

To minimize your non-mortgage debt and pay down your mortgage faster, CIBC 
offered the following advice for Canadians taking on a mortgage:
    --  Talk to an Advisor - Taking your complete financial picture
        into account when choosing your mortgage can help you pay it
        down sooner, with particular emphasis on cash flow to help
        manage the other expenses that come with home ownership. The
        better you manage the rest of your finances, the faster you'll
        be able to pay down your mortgage.
    --  Consider a Mortgage with both a competitive rate and cash back
        up front - Moving into a new home can incur a number of
        expenses, some of them unexpected. For some homebuyers, it may
        make sense to consider a mortgage offer that comes with cash
        back up front as well as a competitive fixed rate. To meet the
        needs of new homebuyers, CIBC created a mortgage offering up to
        3% cash back plus a competitive rate on a 5-yr fixed, closed
        mortgage.  The cash up front can help to offset moving and
        other expenses, and avoid incurring debt early on in your
        mortgage.
    --  Look at reducing your overall interest costs - If you have
        accumulated non-mortgage debt since purchasing your home, it's
        important to look at all of your interest rates and determine
        your overall borrowing costs.  Although you may have a low
        mortgage rate, your overall average borrowing cost is likely to
        be higher because of balances on higher interest borrowing
        options.  If you have equity in your home, you may want to
        consider consolidating your debt with a secured line of credit,
        like CIBC's Home Power Plan to reduce your overall interest
        costs, freeing up some of your monthly cash flow and allowing
        you to redirect some extra money to mortgage repayment.

Additional Data:

Average Age at which Canadians believe their mortgage will be paid
off, by region
                                              

National                     57 years of age  

Atlantic Canada              57 years of age  

Quebec                       57 years of age  

Ontario                      57 years of age  

Manitoba and Saskatchewan    58 years of age  

Alberta                      57 years of age  

British Columbia             59 years of age  
                                              

Percentage of Canadians who say they've taken on additional
non-mortgage debt since buying a home
                                              

National                     50%              

Atlantic Canada              51%              

Quebec                       48%              

Ontario                      51%              

Manitoba and Saskatchewan    50%              

Alberta                      52%              

British Columbia             47%

Results are based on a CIBC poll conducted by Leger Marketing via a Web survey 
conducted from February 19 to 25, 2013 among a representative sample of 1,503 
English- and French-speaking Canadians 18 years of age or older, with a 
mortgage and responsible for decisions related to their mortgage.. Using data 
from Statistics Canada, the results were weighted according to gender, age, 
region, language spoken at home, education and presence of children in the 
household to ensure a sample representative of the entire population under 
review. In comparison, a probability sample of the same size would yield a 
margin of error of ±2.53%, 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.

 

 

Kevin Dove, Communications and Public Affairs, CIBC at 
416-980-8835, kevin.dove@cibc.ca

SOURCE: CIBC

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/April2013/05/c2385.html

CO: Canadian Imperial Bank of Commerce
ST: Ontario
NI: FIN ECOSURV 

-0- Apr/05/2013 10:00 GMT

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