More Canadians shift to fixed terms, cut back on spending, and hold tight on housing goals
Canadian homeowners appear to be weathering economic uncertainty with surprising confidence, even as the cost of living, inflation, and fluctuating interest rates remain top concerns. A new CIBC poll shows that a majority of mortgage holders feel in control of their financial situation and are taking proactive steps to stay that way.
According to the survey, 64% of variable-rate mortgage holders report that recent rate fluctuations have had little to no impact on their standard of living. Similarly, 59% of those anticipating higher mortgage renewal rates say their lifestyles remain unaffected.
"As mortgage rates are declining, it's encouraging to see that despite continued financial pressures, the majority of homeowners remain confident in their ability to manage their living expenses," said Daniel Rethazy, senior vice president of personal lending at CIBC.
For those set to renew in the next two years, fixed-rate mortgages are emerging as the preferred option. Sixty-four percent (64%) plan to lock into fixed rates, while 17% are leaning toward variable, and 19% say they’re still undecided.
That cautious approach reflects growing expectations around rising costs. Six in 10 homeowners expecting to renew anticipate a rate increase of one to two percentage points.
At the same time, many are keeping a close eye on broader economic pressures. Inflation and general cost of living top the list of concerns for mortgage holders, followed closely by economic conditions, interest rates, and the possibility of new US tariffs. Political uncertainty in the lead-up to Canada’s federal election is also on their radar.
Many homeowners are already adjusting their spending habits. More than half of those expecting higher rates say they’re cutting back on discretionary purchases, including travel and entertainment, and choosing more affordable retailers. Others are looking for better mortgage deals, exploring ways to increase their income, or making extra payments toward their principal.
Despite the financial noise, the CIBC poll found that homeownership still holds strong emotional value. Nine in 10 homeowners said they feel proud of their homeownership achievement—an encouraging sign, given the shifting dynamics of the market. Currently, 55% of Canadians own homes.
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While existing homeowners remain relatively stable, the picture is more complicated for aspiring buyers.
A separate report from NerdWallet found that 54% of Canadians still intend to buy a home in the next five years, but for many, that timeline is getting pushed back. Just 12% said they plan to buy within the next year, while 14% are looking at a one- to two-year timeframe, and another 14% said they’re holding off for four to five years.
Younger Canadians are still the most likely to enter the market. Among those aged 18 to 34 and 35 to 44, 74% plan to buy in the next five years. That drops to 60% for those aged 45 to 54, and just 32% for the 55-plus group. Even within those timeframes, urgency varies – 35% of people in the 35 to 44 range say they’ll buy in the next two years, while only 15% of older Canadians say the same.
That gap reflects deeper affordability challenges and shifting expectations. Nearly 70% of Canadians say something is currently preventing them from buying a home or moving. Among non-homeowners, the top barriers are high living costs (38%), low income (35%), and a lack of down payment savings (35%).
For current homeowners, affordability remains a concern, but market-related issues like limited inventory (22%), high mortgage rates (17%), and a competitive housing market (15%) are more likely to stand in the way.
Although some homeowners cited income limitations (13%) and down payment constraints (12%), those concerns were far more common among renters and first-time buyers trying to break into the market.
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