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Time are a changin’ – But really for the worse?

Mortgage Tips Kristin Woolard 4 Jul

Times are a changin’ – But really for the worse?

All we hear about on the news these days is how dire things are in the world right now. With inflation still on the rise, the war in the Ukraine and the ongoing disruption of the supply chains it feels like all we hear is the alarm of Chicken Little – ‘the sky is falling!’.

But let’s get a little perspective… over the past 2 years with record low interest rates and pent-up demand coupled with the COVID driver in the real estate market, things have been going at break-neck speed. Ever hear the saying when you’ve been travelling at 150mph and slow down to 100mph it seems like you’ve almost stopped. But really, you’re still going 100!

The real estate market has cooled and mortgage interest rates have actually returned to more normal levels. Money has basically been on sale over the past 2 years and now that we’re seeing 5-year fixed rates at around 5.50% and Variable interest rates set to be close to 4.25% by mid July that’s basically on par with the new normal that was established after 2008/09 global economic melt down.

In my 20 years’ experience I’ve seen it usually takes about 2 years for a major market disruption to filter through the mortgage industry. Banks make policy adjustments, government reviews bank policy to ensure prudent lending practices are being adhered to and Canadians still need homes and with that, mortgages. And the floodgates of Immigration haven’t even been opened all the way yet…

So while it may feel like this isn’t the right time to do anything with your house or mortgage it might actually be the ideal time to let your home help you out.

Property values are still strong so you likely more equity in your home than you did 2 years ago. That means you have more power to accomplish financial goals now that you may not have had in 2019 or earlier.

If you still need to upsize to get the office space you need working from home more now, you can always port your existing mortgage and just add any extra money to it to buy that new home.

Interest rates are likely higher than what you have on your current mortgage so if you have to break your mortgage now for any reason that actually translates into a lower penalty to do so – likely only 3-months of interest.

And here’s the tough reality… we don’t know when the cost of living might start coming down. Groceries are almost double and don’t even get me started on gas! If you’re feeling the pinch maybe it is an appropriate time to see how using the equity in your home can help ease things. Refinancing your mortgage to pay off loans, credit cards and lines of credit could reduce your monthly out-put and give you some much-needed relief.

As always, a mortgage professional can help get you the information you need to make an appropriate decision. A mortgage analysis is free so why not see what your options are! And I’m here to help.


  • Written by Kristin Woolard