Why Now Is the Right Time to Review Your MortgageGuy Ward
I just wanted to quickly wrap up last week’s blog before moving on…
With the continuation of all the negativity surrounding the changes, I wanted to inject an alternate perspective. When you have a large bonus cheque or a windfall of some kind, most of us would set some aside for a rainy day. This could be exactly what the recent government changes equate to on a national level. The Canadian economy is performing well (relative to our neighbours and partners around the world), so this is a great opportunity to build in some rainy day options. When Prime went up, it built in a small cushion, the amortization was tightened and we have another cushion, now if the economy falters again, we have some tools we can use to ease the impact and indeed provide economic stimulus.
So we’ve had a good, long run of interest rates at record lows, but with increases on the horizon it’s time to take a look at how that will affect your mortgage. Economists are forecasting steady rate increases over the next few years. Huge jumps are not expected. Rather, the industry expects small and steady increments of a quarter to a half point every quarter – barring any major disasters. As interest rates increase, the cost of mortgaging a home will also rise. However, a recent study found that the vast majority of Canadians are not taking undue mortgage risks and have factored rising interest rates into their mortgage decisions and with the positive outlook for employment, increased income should offset much or all of the increases in mortgage payments. Now is a good time to review your mortgage details with a mortgage professional. If you are highly leveraged and have a variable rate, it might be prudent to lock into a fixed rate. If you are near the end of your mortgage term, your mortgage professional will find the best solution to meet your needs. If you get stuck with a higher rate and are feeling the pinch, the best option might be to restructure your mortgage loan to help make monthly payments more manageable. Rising interest rates will have an effect on your finances and investments. Your professional advisor can help you make the best mortgage decision for your personal situation and your overall financial goals.
Guy the Mortgage Guy!
Guy Ward is a Mortgage Associate in Calgary, Alberta with TMG (The Mortgage Group)…