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Canadians playing it safe with with mortgages, report finds
Canadian home buyers are being cautious when taking out new mortgages, a report suggests.
The Canadian Association of Accredited Mortgage Professionals examined 40,000 loans issued in 2009, and found that 86 per cent of new mortgages issued were fixed-term. These are considered less risky than variable-rate terms, because the homeowner is locked in at one rate for a set amount of time, typically five years.
"The vast majority of Canadian mortgage borrowers are not taking on undue risks," said Jim Murphy, the association`s president. "They have factored rising interest rates in to their mortgage decisions."
While variable rate loans have been available as low as 2.25 per cent (compared to 4 per cent for fixed rate mortgages), there is concern that interest rates will rise higher and make it difficult for many on variable plans to meet their rising costs.
Read the full article here.
Canadian home buyers are being cautious when taking out new mortgages, a report suggests.
The Canadian Association of Accredited Mortgage Professionals examined 40,000 loans issued in 2009, and found that 86 per cent of new mortgages issued were fixed-term. These are considered less risky than variable-rate terms, because the homeowner is locked in at one rate for a set amount of time, typically five years.
"The vast majority of Canadian mortgage borrowers are not taking on undue risks," said Jim Murphy, the association`s president. "They have factored rising interest rates in to their mortgage decisions."
While variable rate loans have been available as low as 2.25 per cent (compared to 4 per cent for fixed rate mortgages), there is concern that interest rates will rise higher and make it difficult for many on variable plans to meet their rising costs.
Read the full article here.