CIBC Poll: Canadians locking into fixed rate mortgages this spring on expectations that low rates can't last forever

CIBC Poll: Canadians locking into fixed rate mortgages this spring on 
expectations that low rates can't last forever 
Despite the latest Bank of Canada call, almost half of Canadians surveyed 
expect higher rates next year 
TORONTO, April 16, 2014 /CNW/ - Despite the Bank of Canada today holding its 
key interest rate steady for the 29(th) consecutive time since September 2010, 
a recent CIBC (TSX: CM) (NYSE: CM) poll conducted by Nielsen finds that nearly 
half of Canadians don't think low rates will last forever and expect mortgage 
rates to be higher a year from now. The poll also shows that Canadians are 
increasingly focused on moving to fixed-rate mortgages. 
The key highlights of the poll include: 


        --  47 per cent of Canadians think mortgage rates will increase in
            the next 12 months, up from 38 per centwho felt that way last
            year;
        --  48 per cent would choose a fixed rate mortgage if they had to
            make that decision today, the fourth year in a row that fixed
            mortgages have been the choice of Canadians;
        --  31 per cent would choose a variable rate mortgage today; and
        --  19 per centwere undecided as to which type of mortgage they
            would choose.

"Even though we've had a relatively stable rate environment for a number of 
years, Canadians are being prudent when it comes to mortgage planning and are 
factoring in the possibility of higher rates in the near future," says Barry 
Gollom, Vice-President, Secured Lending and Product Policy at CIBC. "With 
fixed rates near historic lows, Canadians see an opportunity to lock in for a 
number of years in order to reduce the risk of expected higher interest costs."

With interest rates as low as they are now, homeowners can take advantage of 
the opportunity to accelerate their mortgage payments. For example, one 
strategy is to set your mortgage payment at the amount it would be if rates 
were 1-to-2 per cent higher. Not only will this help pay down the principal 
faster, but it prepares you for future rate increases, says Mr. Gollom.

New homeowners looking for greater predictability

The poll also revealed that younger Canadians were even more likely to choose 
a fixed mortgage, with 56 per cent of Canadians aged 25-34 saying they would 
lock in to a fixed rate today, a number that has been steadily increasing over 
the last four years. In contrast, more established homeowners (aged 45-54) 
were among those less likely to lean towards a fixed rate (43 percent).

"For those that have recently taken out a mortgage, and may have additional 
expenses or hold other debt, the predictability of a fixed mortgage rate may 
be more appealing," says Mr. Gollom.  "However those who have paid off a 
sizeable portion of their mortgage are likely less sensitive to rate changes."

"As part of any long term mortgage strategy, homeowners at all stages should 
consider their tolerance for fluctuating rates when deciding on whether to 
choose a fixed or variable rate - as both have their place," he adds.

Finding the right mortgage is about more than rates

With nearly one in five Canadians (19 per cent) undecided about which type of 
mortgage rate they would choose, it highlights the importance of talking to an 
advisor to understand your options.

"Although deciding between a fixed and variable rate is an important component 
in selecting a mortgage, there are other factors to consider, such as flexible 
repayment options," Mr. Gollom says. "An advisor will look at your overall 
financial picture, and help you select the right mortgage for you."

KEY POLL FINDINGS

Percentage of Canadians who believe mortgage rates will be higher 12 months 
from now, by age:
     ____________________________
    |        |2014|2013|2012|2011|
    |________|____|____|____|____|
    |National| 47%| 38%| 44%| 61%|
    |________|____|____|____|____|
    |18-24   | 49%| 41%| 50%| 65%|
    |________|____|____|____|____|
    |25-34   | 49%| 41%| 48%| 60%|
    |________|____|____|____|____|
    |35-44   | 55%| 35%| 40%| 60%|
    |________|____|____|____|____|
    |45-54   | 43%| 36%| 42%| 63%|
    |________|____|____|____|____|
    |55-64   | 42%| 40%| 47%| 60%|
    |________|____|____|____|____|
    |65+     | 42%| 37%| 42%| 57%|
    |________|____|____|____|____|

Percentage of Canadians who believe mortgage rates will be higher 12 months 
from now, by region:
     _____________________________________________
    |                         |2014|2013|2012|2011|
    |_________________________|____|____|____|____|
    |National                 | 47%| 38%| 44%| 61%|
    |_________________________|____|____|____|____|
    |Atlantic Canada          | 44%| 42%| 56%| 64%|
    |_________________________|____|____|____|____|
    |Quebec                   | 32%| 33%| 39%| 54%|
    |_________________________|____|____|____|____|
    |Ontario                  | 51%| 39%| 44%| 66%|
    |_________________________|____|____|____|____|
    |Manitoba and Saskatchewan| 49%| 46%| 48%| 54%|
    |_________________________|____|____|____|____|
    |Alberta                  | 56%| 38%| 50%| 57%|
    |_________________________|____|____|____|____|
    |British Columbia         | 56%| 40%| 38%| 63%|
    |_________________________|____|____|____|____|

Percentage of Canadians who would choose a fixed rate mortgage today, by age:
     ____________________________
    |        |2014|2013|2012|2011|
    |________|____|____|____|____|
    |National| 48%| 45%| 50%| 39%|
    |________|____|____|____|____|
    |18-24   | 47%| 39%| 59%| 44%|
    |________|____|____|____|____|
    |25-34   | 56%| 54%| 51%| 40%|
    |________|____|____|____|____|
    |35-44   | 53%| 46%| 55%| 51%|
    |________|____|____|____|____|
    |45-54   | 43%| 45%| 50%| 41%|
    |________|____|____|____|____|
    |55-64   | 47%| 46%| 50%| 38%|
    |________|____|____|____|____|
    |65+     | 43%| 35%| 44%| 22%|
    |________|____|____|____|____|

Percentage of Canadians who would choose a fixed rate mortgage today, by 
region:
     _____________________________________________
    |                         |2014|2013|2012|2011|
    |_________________________|____|____|____|____|
    |National                 | 48%| 45%| 50%| 39%|
    |_________________________|____|____|____|____|
    |Atlantic Canada          | 50%| 37%| 63%| 43%|
    |_________________________|____|____|____|____|
    |Quebec                   | 48%| 45%| 51%| 45%|
    |_________________________|____|____|____|____|
    |Ontario                  | 48%| 41%| 49%| 35%|
    |_________________________|____|____|____|____|
    |Manitoba and Saskatchewan| 47%| 64%| 46%| 33%|
    |_________________________|____|____|____|____|
    |Alberta                  | 42%| 47%| 49%| 36%|
    |_________________________|____|____|____|____|
    |British Columbia         | 51%| 49%| 48%| 38%|
    |_________________________|____|____|____|____|

Each week, Nielsen Consumer Insights interviews just over 1000 Canadians 
through teleVox, the company's national telephone omnibus survey. These data 
were gathered in a sample of 1,015 Canadians between February 6-10, 2014. A 
sample of this size has a margin of error of +/-3.1%, 19 times out of 20. Some 
sample sizes for regional and age groups under Key Findings are smaller than 
typically reported and provided only as reference data.

About CIBC

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 
Media Centre on our corporate website at www.cibc.com.



SOURCE  CIBC 
Caroline Van Hasselt, Director, External Communications, 416-784-6699  
orcaroline.vanhasselt@cibc.com 
To view this news release in HTML formatting, please use the following URL: 
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CO: Canadian Imperial Bank of Commerce
ST: Ontario
NI: FIN MMC MOR ECOSURV  
-0- Apr/16/2014 14:46 GMT
 
 
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