Counterpoint to CAAMP’s Findings

CAAMP’s recent findings (that 86% of 2009 home buyers chose fixed rates) is being questioned by Scotia Capital economist, Derek Holt.

This is from a recent Macleans article:

• “I have difficulty with the CAAMP report,” says Holt. “I think their study grossly underestimates mortgage rate sensitivities.”
• He thinks “as many as” 50% of new mortgages are subject to rate risk because of them having variable or 1-year terms.  (We haven’t seen any other published stats corroborating this sort of number.)
• Holt says: “It doesn’t even really matter if they went variable rate or fixed rate, because pretty much all of the mortgage market in Canada resets in the next five years.”