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Mortgage renewals in a rising rates environment

Housing market activity and prices have declined as per the latest market reports and the Bank of Canada continues to combat inflation with rate hikes that have been affecting the cost of borrowing.

CIBC’s deputy chief economist, Benjamin Tal, describes what’s happening today as a reallocation of activity and a necessary adjustment after the record high activity levels we’ve seen when rates were extremely low.

However, given the rising rates, more than 50% of Canadian mortgage borrowers are concerned about higher mortgage payments at renewal time as per a recent survey, especially with another rate increase expected at the next Bank of Canada announcement in December. Some borrowers with straight variable rate mortgages have already had to increase their monthly payments during their term to cover the rising interest portion of their payment.

If your mortgage is coming up for renewal soon, the best move you can make is to speak with a mortgage professional. It’s important to review your situation, find out if remaining with your current lender is still the best option for you, and assess the impact that rising mortgage payments will have on your budget. Mortgage Alliance professionals can advise you on the best mortgage strategy to implement in order to meet your specific needs and show you solutions that may help reduce your new monthly payment at renewal if cash flow is an issue or show you options that can help you save the most in interest costs in the long run by making the right moves today.

Call your Mortgage Alliance Professional. They are here to help!