Canadians are Feeling the Pinch

It seems anyone I talk to these days is feeling like there is some strange energy going on in the world. With the crazy high inflation, rising interest rates and the war in Europe it seems there is no positive news to be had. And there is a lot of anxiety and uncertainty as to what will happen in the near future.

The cost of living has increased dramatically over the last year and that has left many Canadians feeling pinched trying to make ends meet. Higher grocery prices, fuel, goods and services costs it seems no matter which way you look your dollar isn’t going near as far as it used to.

Being in a rising interest rate environment it would seem this would be the worst possible time to make a change to your mortgage. But what are the implications of refinancing now for a little relief to the bottom line? Is a short-term cash flow solution worth a small penalty and higher interest costs in the interim?

While there is no one answer for everyone if you are feeling the pinch, especially with the holidays looming, it may be a good idea to have a mortgage analysis done so you can see your options.

These days paying out a mortgage with a lower interest rate means that it’s very likely that only a 3-month of interest penalty would apply. That is much lower than the Interest Rate Differential (IRD) penalty we’ve been up against for the past several years.

So, if penalty is not prohibitive then it might be prudent to consider tapping into your equity to possibly consolidate higher-interest debt (credit cards, lines of credit, loans etc.), beefing up the savings account and stretching out your amortization to lower your overall monthly expenses. Help free up some cash so you can hunker down and ride out this strange storm.

Economic experts are saying that elevated rates will remain through 2023 and into 2024 until the world has a chance to settle out. Going into a shorter term for some relief until then may be an option. I offer a free mortgage analysis, so let me help you.