How To Cope With Rising Interest Rates
October 16, 2023 | Posted by: Blue Pearl Mortgage GroupAs the saying goes, the only constant thing in life is change, and this couldn't be any truer for the housing market in Canada. In recent times, we have witnessed a spike in mortgage rates, which has made owning a home quite a daunting task for many. This increase has left homeowners struggling to make their mortgage payments while others are getting priced out of the market. If you're currently feeling overwhelmed by rising mortgage rates, then you're not alone. However, the good news is that there are a few strategies that you can use to cope with the hike.
The first strategy is to shop around for better mortgage rates. Mortgage rates vary from one lender to the other, and by taking the time to compare various rates, you could end up with a much lower rate than what you're currently paying. Ensure that you research the various options available to you, and don't be afraid to negotiate with your lender. Even a 0.1% reduction can significantly lower your mortgage costs in the long run.
Another way to deal with the increase is to refinance your mortgage. Refinancing is where you replace your current mortgage with a new one that has a lower interest rate, more favorable terms, or both. By refinancing your mortgage, you could save a significant amount of money on your monthly payments. It's essential to work with a reputable mortgage broker or advisor who can guide you through the process and help you find the best deal.
If you're struggling to make your mortgage payments, consider extending the amortization period of your mortgage. Extending the amortization period will lower your monthly payments, but it also means that you'll be paying your mortgage for a longer period. You'll also end up paying more interest over the life of your mortgage, but it could be worth it if you're finding it hard to make your current payments.
Finally, if you're really struggling to keep up with your mortgage payments, consider selling your home and downsizing. Selling your home and downsizing could help you free up some money that you could use to pay off your mortgage or reduce your monthly payments. While this option may not be ideal for everyone, it's important to weigh your options and see what works best for you and your family.
In conclusion, the hike in mortgage rates in Canada has made owning a home quite challenging for many Canadians. However, there are several strategies that you can use to cope with the increase, including shopping around for better rates, refinancing, extending your amortization period, or downsizing. Whatever option you choose, ensure that you take the time to research and work with reputable professionals who can guide you through the process. Remember, while the hike in mortgage rates may seem overwhelming, with the right strategies and mindset, you can still achieve your dream of owning a home in Canada.