Despite close to record-low rates for variable mortgages, a strong majority of home buyers are choosing to pay a little more for the stability of a fixed rate, industry data shows.

People walk past new homes that are for sale in Oakville, Ont. Low mortgage rates are helping push first-time home buyers to enter the market in droves, experts say. (Nathan Denette/Canadian Press)

A full 86 per cent of borrowers signing up for mortgages in 2009 opted for fixed rates, data compiled by the Canadian Association of Accredited Mortgage Professionals suggested Thursday.

The agency surveyed more than 40,000 mortgages issued in 2009, worth some $10 billion in total, to look for lending trends.

The $10 billion examined is a tiny slice of the overall mortgage market, but was tailored toward first time buyers, the borrowers CAAMP deemed to be most vulnerable to rate fluctuations.

The 86 per cent figure seems high, but it's actually lower than where it was earlier in the year as variable rates became more attractive later on, CAAMP president Jim Murphy said, with some variable mortgages coming in as low as 2.25 per cent, compared to four per cent for fixed terms.

The trend toward fixed rates speaks to the oft-cited Canadian predilection for stability, Murphy says.

"Canadians have always been more cautious," he said "And you can see that bearing out in the fact that most go for the fixed product."

'Canadians have always been more cautious'—CAAMP president Jim Murphy

Among those who opted for fixed terms, the majority (70 per cent) opted for a term of five years or longer. And the vast majority of people who took out their first mortgage last year borrowed less than they could afford to, as their gross debt service ratios — a closely watched ratio of how much income it takes to service a debt — are far below allowed maximums.

"This group is the most vulnerable group of borrowers in Canada [but] they are being prudent and the vast majority of Canadian mortgage borrowers are not taking on undue risks," Murphy said.

A small minority of buyers, however, might be cutting it close, CAAMP said. "Our data shows that only a small percentage of them are pushing-the-envelope [by coupling near-maximum debt levels with short-term low rates]," the group's economist Will Dunning said. "About 4,000 households, which amounts to a tiny fraction of the 13.25 million homeowners in Canada."

In late 2009, both Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney banged the drum on excessive debt levels, and urged Canadians to get their financial houses in order. Flaherty mused publicly about raising the minimum down payment level when buying a home from five per cent, or possibly reducing the maximum amortization period lower than it's current level of 35 years.

The Bank of Canada is set to reveal its next decision on interest rates on Tuesday.