How This New Mortgage Trend Could Affect You
Canada’s housing prices have been soaring due to high demand over the last few years. However, as interest rates rise, it could cool down the overheated market slightly.
Since higher interest rates would make mortgages more expensive, homeowners would have to pay hundreds of dollars more on monthly payments. In addition, higher interest rates would also affect lines of credit, car loans, and student loans which means Canadians will be spending less.
Benefits of higher interest rates
If you are still in the process of saving for a deposit, keep in mind that higher interest rates can be beneficial for savings as they could grow faster in certain bank accounts. Many fixed-rate investments, like GICs, could also deliver higher returns, and it’s worth updating mutual funds and segregated funds policies.
It’s decision time!
Since there are advantages and disadvantages to the rising interest rates, you should try to make the most of them or at least avoid the negative impact on your mortgage.
The following are three recommendations to consider:
1. If you have an Open Mortgage, look at changing it to a Closed Mortgage.
2. If you have a Variable Rate Mortgage, look at switching it to a Fixed Rate Mortgage.
3. Consolidate your debts with Variable Interest Rates into a Fixed Rate Mortgage if you have equity in your property.
If you would like to learn more about interest rates or are looking to secure a mortgage, you can schedule a free consultation by giving us a call today. With many years of experience, Coast2Coast Mortgages will help you with all your mortgage needs in Scarborough, Miami, and Mississauga.
Our services include first mortgages, second mortgages, home equity line of credit (HELOC), refinancing, switch/transfer mortgages, and debt consolidation. We also assist with home trust secured visas, construction loans, USA mortgages for Canadians, new to Canada mortgages, and investment/vacation property mortgages.
We serve clients across Scarborough, Mississauga, Greater Toronto Area, York Region, Peel Region, Halton Region, and Cambridge. We also cover Kitchener, Waterloo, Barrie, Innisfil, Durham Region, Ontario, and Miami, FL.