Interest rates are starting to impact the housing markets. After 8 consecutive hikes, some homeowners are at the brink of affordability. CTV’s Krista Sharp takes a look at how the local market is reacting and what your options are if your payments are spiraling out of control.
Krista Sharp: Bank of Canada’s interest rates holding steady at 4.5%, but mortgage rates are even higher.
Richard Kitts (The Mortgage Centre KW): People have 1-2% even and they are coming up and they are a little nervous about things for sure.
Krista Sharp: Some homeowners with fixed-rate mortgages coming up for renewal are scared their payments may become too much. While variable-rate homeowners have been feeling the pinch all along.
Tony Johal (Real Estate Broker): Then of course one of the things they do consider right away is downsizing their house or downsizing their mortgage just to get back in alignment with their lifestyle.
Krista Sharp: Real Estate Broker, Tony Johal, says he has been getting lots of inquiries lately about potentially downsizing.
Tony Johal: Quite simply, because the rates have made somebody’s payments on a mortgage renewal very, very expensive.
Krista Sharp: But a smaller home isn’t the only road to a smaller mortgage.
Jon Kitts (The Mortgage Centre KW): Get a professional on the phone and just let them run down your finances, your mortgage payments, and all that stuff. Don’t leave it until the last minute.
Krista Sharp: The Mortgage Centre KW suggests talking to an expert even a year before your renewal, if you can, to start mapping out a plan.
Richard Kitts: There are ways to maybe reduce your payments. Longer amortizations, interest-only programs (which you have to be careful with), etc. Really the main thing at this point is to try not to panic. Rates are steady now.
Krista Sharp: The Bank of Canada’s next scheduled rate announcement is set for April 12th, just in time for Spring when the housing market traditionally heats up.
Check out the full article on the CTV News website here!