There’s been a significant decrease in the number of people using today’s low-interest-rate environment to accelerate mortgage repayment, finds a CIBC poll.
While more than half of Canadians continue to do so (55%), a similar poll last year found more than two-thirds of people (68%) were taking extra steps to accelerate repayments in 2013.
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The current poll reveals Canadians with mortgages predict they’ll be 58-years-old, on average, before they become mortgage-free. That compares to an average age of 57 in 2013.
“A mortgage is the largest debt most Canadians will take on in their lifetime, and being mortgage-free is an important goal for many,” says Barry Gollom, vice president of Secured Lending and Product Policy at CIBC.
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Due to current low interest rates, he adds, this may be an opportune time for clients to make progress against their mortgages.
Key poll findings include:
- About a third of respondents (32%) have accelerated their payment frequency this year (down from 42% in 2013);
- Twenty-eight percent increased their payment amounts (compared to 30% last year); and
- On the bright side, nearly one-fifth of people (18%) have made pre-payments or lump sum payments on their mortgages in 2014 (a rise from 15% in 2013).
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Still, recent CIBC research finds many Canadians are spending more this year on items such as home renovations (up 30% over last year year ago) and summer vacations (up 20% over 2013).
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“With mortgage rates remaining relatively stable and at historic lows for the last few years, some people may not be as focused on paying down their mortgages” as they should be, notes Gollom.
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Poll result breakdown
The average age Canadians expect to be mortgage-free by can be seen below. Results are broken down by region.
| National | 58 |
| Atlantic Canada | 57 |
| Quebec | 56 |
| Ontario | 57 |
| Manitoba and Saskatchewan | 58 |
| Alberta | 55 |
| British Columbia | 66 |
The percentage of Canadians who’ve taken some action to repay their mortgage faster can be seen below. Results are broken down by region.
| National | 55% |
| Atlantic Canada | 48% |
| Quebec | 48% |
| Ontario | 61% |
| Manitoba and Saskatchewan | 51% |
| Alberta | 65% |
| British Columbia | 47% |
Also read:
Mortgage investing offers opportunities
Clients should pay for kids’ homes: Golombek