A “For Sale” sign stands in front of a home that has been sold in Toronto, Canada, June 29, 2015. REUTERS/Mark Blinch/File Photo
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TORONTO, Aug 10 (Reuters) – Canadian home buyers are shifting to fixed-rate mortgages at the fastest pace in a year, on bets that more rate hikes from the central bank are in store to bring inflation under control, even as the cost of these home loans remains close to the highest level since 2009.
Borrowers are also increasingly eschewing the popular five-year fixed mortgage term in favour of two- or three-year loans, to guard against the possibility that the Bank of Canada’s rapid rate hikes push the economy into a recession and result in another easing cycle.
More than half of Canadian home buyers opted for variable-rate mortgages since July 2021, as these became cheaper relative to fixed.
