A recent report by RBC Capital Markets has shed light on a stark reality. Approximately $900-billion worth of Canadian mortgages are set to renew between 2024 and 2026. With mortgage interest rates climbing over the past year, many could face a considerable hike in their monthly mortgage payments — a mortgage payment shock.

What to Expect at Renewal Time

For those with variable-rate mortgages, the mortgage renewal period could result in an increase in payments from 32% in the near term to as much as 76% by 2026, if mortgage interest rates remain around 6%. This could have a significant impact on household budgets and spending power.

Proactive Measures for Homeowners

Despite these daunting numbers, there’s room for strategic planning. ComFree Realty recommends several steps to mitigate the impact:

1. Evaluate Your Mortgage Type: If you have a variable-rate mortgage, consider the implications of rising mortgage interest rates on your renewal.

2. Plan Ahead: Start planning for these potential increases now by adjusting your budget and saving where possible.

3. Consult with Professionals: Speak to financial advisors or your mortgage professional about options like increasing monthly payments or extending your loan’s amortization to soften the future financial hit.

Banks/Lenders Offering a Helping Hand

The silver lining is that Canadian banks and lenders are proactive. They’re working with clients to find manageable solutions, such as revising payment plans to help homeowners navigate through these changes without drastic consequences.

The Bottom Line: Managing Your Mortgage Renewal Strategy

While the coming years will undoubtedly present financial mortgage challenges for homeowners, with careful planning and the right guidance, it’s possible to weather the mortgage renewal storm. ComFree Realty is committed to providing the advice and support you need to make informed decisions about your home and finances. For more information about calculating your future payments, visit our comprehensive mortgage calculator.

Stay Prepared with ComFree Realty

Need more guidance on managing your mortgage in a changing economy? Learn more about how the home buying process works or contact a ComFree Team today.

Courtesy of Whatever Else Marketing