Sarah A. Colucci, York Region's Mortgage Expert. Savings Guaranteed.
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?

Sarah Colucci's Mortgage Blog

Stay enlightened about mortgage & real estate news in Canada.
Mortgage News 2022

Financial trouble : a very real possibility for Canadians renewing their mortgage...

1/22/2018

0 Comments

 
Picture
  • Are you set to renew your mortgage soon? Have you given interest rates any thought? Even if you're mortgage's maturity date isn't until one to two years from now, have you contemplated how higher interest rates will impact your finances when the time comes?

For over twenty years, mortgage interest rates in Canada have lowered, making a "mortgage maturity date" an event looked forward to by many borrowers. That's because, at the end of their mortgage term, borrowers traded higher interest rates for lower ones and even consolidated expensive unsecured debt into their home loan. They acquired the benefits of lower monthly payments and more room for monthly savings. 

Today, things have changed. Bidding wars are no longer typical.  Houses for sale are flat (some with no offers). New mortgage rules make mortgage qualification extremely challenging, and interest rates are increasing. 

According to Bank of Montreal, 47% of mortgages are set to renew within eight months, and according to betterdwelling.com, rate hikes would hurt approximately 63% of mortgage holders in 2018. That's because 30% of mortgages are currently variable rates.  And, in light of the new drastic and consecutive rate hikes initiated by the Bank of Canada, fewer people will be comfortable taking a variable rate product. 

The reality is striking.  

What can borrowers do today?

When it comes to mortgage approvals, appraisals are almost always required by banks & other various lenders. Appraisals determine a property's value, so, in order to refinance and even consolidate unsecured debt, the value must be sufficient. With homes becoming more difficult to sell, and purchasers experiencing financing difficulties, the value of home prices are slowly decreasing. This translates to lower appraisal values. 

One way borrowers may find it difficult to cope with rising interest rates is if they have a fair amount of unsecured debt. Credit cards and other loans can become very costly and difficult to pay down. Refinancing or debt consolidation may no longer be an available option for the many of Canadians who rely on their home's equity to bail them out of more expensive debt.

One should seriously consider refinancing soon to optimize on the following:
  • Sufficient property value 
  • Low interest rates 
  • Current mortgage guidelines as they are subject to change.
  • A chance to get out of debt now, while reaching a very comfortable and affordable monthly payment.

Feel free to call with any questions.
​647-773-4849


Sources: 

Wong, Daniel. "Bank of Canada: Half of Canadian Real Estate Mortgages Will Renew By Next Year." Better Dwelling. November 29, 2017. Accessed February 04, 2018. https://betterdwelling.com/bank-of-canada-half-of-canadian-real-estate-mortgages-will-renew-by-next-year/amp/.


"BMO: '47% of Canadian mortgages are due to reset within 1 year'." The Globe and Mail. November 29, 2017. Accessed February 04, 2018. https://www.theglobeandmail.com/globe-investor/inside-the-market/bmo-47-of-canadian-mortgages-are-due-to-reset-within-1-year/article37122628/.



Picture

Financial books I recommend: 

Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century
0 Comments



Leave a Reply.

    Picture

    By: Sarah Colucci

    Senior Mortgage Agent, Lic. M14000929

    Archives

    January 2023
    October 2022
    September 2022
    July 2022
    June 2022
    May 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    August 2021
    July 2021
    June 2021
    May 2021
    February 2021
    December 2020
    November 2020
    October 2020
    September 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    February 2019
    January 2019
    December 2018
    August 2018
    May 2018
    April 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017

    Categories

    All

    RSS Feed

GET IN TOUCH WITH US

Let's get started today.



Address

411 Queen St. 
Newmarket, ON
​L3Y 2G9

Sarah A. Colucci, Mortgage Agent Lic. M14000929
Sherwood Mortgage Group
Licence # 12176

Telephone

Direct: 647-773-4849
​
Email: scolucci@sherwoodmortgagegroup.com
Picture
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?