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Pattie Lovett-Reid

Chief Financial Commentator, CTV

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With only a 25 basis point spread on the average five-year fixed mortgage 2.30 per cent vs. the average 5-year variable rate at 2.05 per cent, it isn’t all the surprising the variable rate mortgage is pulling back in popularity.

According to a report conducted by ratehub.ca, there was a 12 per cent decrease in variable rate mortgages and now only represent 30 per cent of mortgages in 2016. A safe bet is better than the unknown given all that is going on with economic uncertainty, growth in Canada and of course the job market. It is good to have a little peace of mind in some elements of your life.

The report highlights other trends:

  • Eighty-seven per cent surveyed said they continue to have high levels of trust in online banking –  but when it comes to other areas focused on newer technologies, we are little hesitant. For example, robo-advisors and marketplace lenders have yet to win us over with just 11 per cent and an 8 per cent level of trust respectively.
  • Surprisingly, millennials and boomers are the most likely to put down 20 per cent on their first home. Dig a little deeper and you find millennials were more likely than those from Generation X to receive a little help from their parents.
  • When it comes to credit card usage – 44 per cent of respondents said they use their credit card for 75 per cent of their monthly purchases. While 45 per cent millennials are the most likely to know their credit score and trumping the boomers with only 36 per cent. In fact, an opportunity presents itself here in terms of consumer education as 58 per cent do not know their score and only 65 per cent believe it to be “very good” or “excellent.”
  • Finally, when it comes to believing we will have enough money to retire, only 35 per cent of those from Generation X compared to 45 per cent of millennials and 63 per cent boomers.

Those of Generation X may be the demographic left behind as they struggle with financial independence. They are the least likely to get help with mortgages and the least likely to believe they will retire with sufficient funds. Yet, maybe in the long run, they will be the most likely to succeed as they haven’t relied on economic outpatient care.