DO you have the BEST mortgage renewal strategy ready for 2023? Interest rates are on the rise, and if your mortgage is due for renewal this year you might be feeling a little anxious. Five years ago when interest rates were near their lowest point ever, those with $500k mortgages could lock in an awesome rate of 3% – meaning monthly payments as low as $2366. If that doesn’t sound like it was all that long ago…that’s because it wasn’t! Suddenly we’re here today facing potentially higher costs at renewal time – no one likes to shell out more money than expected so use these numbers to arm yourself against sticker shock come 2023!
What is the Best Mortgage Renewal Rate Strategy for 2023?
If you’re feeling overwhelmed by high mortgage payments, it might be worth considering extending your amortization. While this may sound daunting at first, lenders usually offer the option to reduce your amortization in later years. For example stretching a 20-year payment plan out over 30 years could cut $125 off monthly costs for every $100K borrowed! The numbers don’t lie so working with a mortgage calculator to confirm numbers is always a good idea
To keep budgeting manageable, why not consider extending the amortization? That’ll help to lower monthly payments. When rates drop down in future you can always refinance or make lump sum payments with available cash.
Should I Lock in from Variable to Fixed?
Thinking of making the switch from a variable to fixed rate mortgage? Good call – currently, fixed rates can be up to 1% lower than their variable counterpart. Plus, if market conditions keep heating up and cause variables rates to go higher like expected, that difference could grow larger! On top of this it’s s key strategy when considering shorter fixed terms. Don’t get locked into historically high interest for longer stretches. Ultimately though ,which option is best comes down how comfortable you are with uncertainty. Call us today to review your options today!
Thinking of switching to a fixed-rate mortgage? In January 2023, the Bank of Canada is likely increasing rates again. Don’t miss out on your chance for some solid savings and peace of mind with your mortgage renewing in 2023.
Careful with your HELOC
Tap into your home equity but take heed – higher interest rates paired with drops in property values can cause major headaches if you’re not careful. One wrong step and you may find yourself underwater, owing more than the house is worth!
Is a 5 Year Fixed Rate a Good Idea? Time to Review
When it comes to mortgages, people tend to stick with the bank they’ve always known. Sure, there’s comfort in that but what you may not know is banks often fail to offer competitive interest rates at renewal. As a mortgage broker I could save clients tens or even hundreds of thousands on their loans. All while you keep all day-to-day banking services exactly as they are! Banking might be big business but at the end of the day your money should stay where? Traditionally in Canada, borrowers take a simple five year fixed rate and set it and forget it. With rates at decade highs that isn’t likely to be the best strategy that will save you over the long run.
It’s time to plan ahead for your mortgage renewal—don’t get left behind! You might have a great rate from 2020-2022, but it’s not likely the same will be around at renewal. To stay on top of things, consider setting aside some extra cash for making a lump sum payment or regular additional payments. This way, you won’t find yourself short when your mortgage renewal comes up.