Ratehub.ca data shows homebuyers are increasingly searching for short-term, fixed rate mortgages as variable rate inquiries continue to fall.
Canadian homebuyers are increasingly searching for shorter-term, fixed mortgage rates in the hope of getting a better deal down the line if the Bank of Canada starts cutting its benchmark rate, according to data from Ratehub.ca.
Searches on the site for one- to four-year fixed rates more than doubled to 14 per cent so far this year, from just six per cent last year, the rate comparison website said in a release on Monday. Meanwhile, five-year fixed rate inquiries represented the bulk of searches on the site at 79 per cent, a jump from 66 per cent last year.
Homebuyers are looking at the benefits of short-term, fixed rates as twofold, Ratehub says, because it safeguards them against near-term potential further rate hikes while possibly allowing them to take advantage of lower rates sooner.
“Consumers are currently more interested than usual in short-term fixed rates because many experts are predicting that rates will drop in the coming years,” said James Laird, co-chief executive officer of Ratehub.ca and president of mortgage lender CanWise.
Many economists believe that interest rates have likely peaked, but still see the possibility of one more quarter-point hike this year because of the stronger-than-expected economy.
