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LOWER MORTGAGE RATES LEAD TO QUICKER AMORTIZATION? NOT NECESSARILY

By Jim on Sep 22, 2014

Overview: A recent study by CIBC suggests that despite enjoying lower mortgage rates, less Canadians are paying off their mortgages quicker. Instead, it appears that the extra money saved by the lower interest rates is going towards other personal interests, such as home renovations and vacations. Are you spending your interest rate savings on your mortgage or on yourself? For more information, along with the facts and figures, check out the full article below.

 


 

Today’s mortgage rates are some of the lowest rates we’ve seen but a recent study byCIBC suggests that a decreasing number of Canadians are using this to accelerate their amortization. According to the study, Canadians are enjoying low rates on their mortgages, but are not using these savings to pay off more on their mortgage. The study also suggests that the extra cash generated by the lower mortgage rates is going towards other personal goals, such as vacations, instead of towards mortgage payment.

 

Are you choosing to quicken your amortization, or enjoy the extra cash?

 

The CIBC study found:
 

  • Over the past six years, the discounted 5-year fix has dropped by more than 2.25%, giving those with mortgages the chance to pay up to 30% more the first five years of a standard mortgage
     
  • Only 55% of Canadians with mortgages were speeding up their amortization, a figure that has dropped from 68% last year
     
  • Canadians are spending 30% more on home renovations and 20% more on summer vacations compared to last year
     

 

What do you think about these figures? Let us know what you’re doing with your interest rate savings in the comments section below. For more information about mortgage rates, real estate, and how to deal with your mortgage, contact Tim Lacroix on 403 648 1541 in Calgary today.
 

 

Enjoy this post? Find out some interesting information? Then why not share it using the Social Media buttons below.
 

 

To read more about the study, check out this link:

http://www.newswire.ca/en/story/1389254/cibc-poll-fewer-canadians-taking-action-to-pay-down-their-mortgages-faster

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