Time to review your mortgage

New year, new mortgage

During the week between Christmas and New Year’s Day, I spent time reflecting on my past year and did my planning for the upcoming year.

That included a review of my financial situation, as well as a look back over the fun things I did, what I feel went well and what I would like to do differently for the coming year, as well as setting new goals for 2024.

One of the things I took a look at was my mortgage. I have stayed with my variable rate over the last year (ouch) but I did make a dent in the principal which was satisfying to see.

There are a significant number of Canadian mortgages coming up for renewal in 2024 and 2025. For my clients who I’ve chatted with, there is a bit of sticker shock with where interest rates are now.

Interestingly, when I compare the stress-test rate we used to qualify clients originally, it is not far off the interest rates available now.

Mortgage renewals are not just about getting the best rate.

I had a great conversation with a friend of mine the week before Christmas. We did a quick review of her current finances and talked about her plans for the next few years. Her mortgage comes up for renewal mid-March. Her first question was with respect to the best rate I could get for her.

I reviewed several lenders and went over the rates they were offering for a fixed-rate five-year term. Her mortgage was originally insured (default insurance with CMHC) so several of the options were very appealing.

When we dove into her finances and her plans for the next few years, we ended up looking at several other options.

In her case she is carrying significant balances on her credit line and credit card. She has been renovating her home and has more work to do. She also needs to replace her furnace and hot water tank. Her goal is to sell her home over the next few years then move somewhere very warm for her retirement.

Based on that information, we looked at other lenders that offer hybrid mortgages. Hybrid mortgages offer both an amortizing portion and a credit line.

We are going to refinance to pay off her credit line and credit card and pull some funds for the work she has left to do. More importantly, we are going to move forward with a three-year term instead of a five-year term. She wants the stability of a fixed-rate but the flexibility of a shorter term so she doesn’t have a significant penalty to pay if she sells her home shortly before the three-year term is up.

We are not moving forward with the lowest rate I could find but rather with the package that best fits her financial goals.

If your mortgage is coming up for renewal (or even if it isn’t) my recommendation is you connect with a mortgage professional to review your options rather than just signing the renewal offer that your current lender sends out.

Wishing you all a wonderful 2024.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Tracy Head helps busy families get a head start on home ownership.

With today’s increasingly complicated mortgage rules, Tracy spends time getting to know her clients and helps them to better understand the mortgage process. She supports her clients before, during, and after their mortgage is in place.

Tracy works closely with her clients, offering advice and options. With access to more than 40 different lenders. She is able to assist with residential, commercial, and reverse mortgages in order to match the needs of her clients with the right mortgage package.

Tracy works hard to find the right fit for her clients and provide support for years down the road.

Call Tracy at 250-826-5857 or reach out by email [email protected]

Visit her website at www.headstartmortgages.com

Download her app: Headstart Mortgage Architects



The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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