Date: June 15, 2023

There’s so much chatter out there about what’s happening, and it can be hard to separate noise from facts.

Let’s look at the facts.

  • The prime rate is at a 22-year high, currently sitting at 6.95%
  • For every $100,000 of the mortgage, your payment will increase by about $15.50
  • Bank of Canada has indicated that it’s prepared to increase rates again next month if inflation numbers continue to rise.
  • The last BOC announcement and the forecasted increase are affecting bond yields which are driving fixed rates up quickly
    If you are sitting on the fence – get off it, especially if you have an upcoming renewal.
  • Remember rate is temporary. Equity is long term
  • Reports from BOC state that one-third of households will see a payment increase of up to 40% at renewal.
    I did the math on a $400,000 mortgage. (currently at 1.89%, 30-year amortization, with a monthly payment of $1,457). When they come up for renewal, if rates are still in the 5% range, their monthly payment will increase by 28% to $2035. This assumes they have not used any pre-payment options during their term.
  • I have been saying it every month in my newsletter, and I will continue to say it: please use your pre-payment privileges, especially if your rate is under 4%
  • New mortgage originations are down 42% in the first quarter.
  • Ask any Realtor or Mortgage Broker, and they will agree this has been the slowest year since 2018
  • Approx 750,000 mortgages are coming due in the next 12 months.
  • 1.3 million borrowers have already missed mortgage payments – according to Equifax
    In the grand scheme, that’s less than 1%; however, if you are among those struggling, reach out and let us work out a solution for you.
    Once you’ve missed a mortgage payment, things get tough with lenders. So make sure you connect before that.
  • Historically variable rates are lower than fixed; however, we are currently in an inverted rate market.
    You need to keep in mind; your rate is temporary; equity builds wealth over time.
  • If you received a mortgage before 2023, remember that you are qualified to carry a mortgage of 5.25%, and we are not far from that rate right now.

There you have it, a current update on the mortgage market.
What are your thoughts?

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