Poll Finds British Columbians Willing to Exchange Flexibility for Lower Mortgage Rates

Prospera Credit Union today announced the findings of a survey gauging British Columbians’ attitudes towards mortgages in today’s economic climate. The poll was conducted on Prospera’s behalf by Ipsos Reid.

Reflecting concern about the current economy, the survey found that 75 per cent of British Columbians are paying closer attention to their household budget than ever before. This focus on household budgeting extends to mortgages, especially among younger British Columbians. The survey found that 60 per cent of younger British Columbians (under 45 years) with a mortgage or in the market for a mortgage were interested in giving up some mortgage payment flexibility in exchange for a lower interest rate.

According to the poll, 59 per cent of all British Columbians were not aware that mortgage holders pay a higher interest rate for the ability to make lump sum payments against their mortgage.

“Canadians across all age and income levels are looking at how they live and how they spend,” says Sundeep Sandhu, Prospera’s VP of Marketing. “While rate, flexibility of payment schedules and the credibility of a lender are still important factors when deciding on a mortgage, the poll demonstrates that the ability to make lump sum payments is much less critical to the consumer – especially in today’s economy.”

Traditional long-term cost-saving measures include increasing mortgage payment amounts and decreasing the loan amortization. However, given today’s economy many homeowners indicated that they would prefer to see the immediate savings obtained from a lower mortgage rate. With mortgage payments comprising 25 per cent of the average Canadian family’s expenses, the savings can be significant.

“The findings of the poll show that there is a need for a mortgage product that allows homeowners to trade flexibility for a lower rate, and that’s why Prospera has introduced the myStyle mortgage,” continues Sandhu. “Why pay for mortgage options that will never be used?"

The myStyle mortgage rewards consumers with a low interest rate on a five-year fixed mortgage. It was designed for people who know they will not take advantage of pre-payment privileges and would rather have a lower interest rate.

The survey also explored other aspects of what concerns British Columbians about the current economic climate.

• Concerned about the economy getting worse: 67% agree
• Had to delay a major purchase: 45% agree
• Concerned about job security: 44% agree

The online poll of 603 adult British Columbians was conducted by Ipsos Reid between April 21 and April 24, 2009.  The margin of error for a sample size of 603 is ±4.0%, 95, times out of 100. The data was weighted to reflect the actual age, gender and regional composition of British Columbians.