Canadians have been hit with the fastest rising interest rates in more than four decades and with many poised to renew their mortgages in the months ahead, some shock may be in store.
Financial experts have said some mortgage holders could see an increase of 30 to 40 per cent in their monthly payments when they renew.
Ron Butler, host of the podcast Angry Mortgage, said there are an estimated 500 mortgages renewed every day in this year and next year there could be as many as 750 a day. That means a lot of people are facing a lot of financial strain all at once.
Knowing this, financial experts are offering some insights on where there may be some wiggle room and what homework needs to be done.
“Canadians should be in the know on where the rates are at, what they want to do with their property, (whether) they’re thinking about selling it in a year or will they last in that home for five years,” Char Oakley from Valley First a Division of First West Credit Union said.
Then they need to make an informed decision on what rate they are going to take and talk to an advisor.
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For those who have to renew right away, Oakley said people could do a lesser term at a higher rate hoping that the rates will come down when they are done that term.
“Or maybe you look to blend and extend where you take the rate you have now you blend it with today’s rate … and you get likely a lower rate than you would be given,” he said.
For those who can afford to wait to renew until 2025, use that year to plan and go see an expert that is going to guide you in the right direction for a year down the road.
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