Mortgage Minute: Your Questions Answered

Date Posted: November 15, 2022

Q: Our mortgage renewal is in the spring and our bank has advised us that we should early renew now as rates could be significantly higher in May but we can’t afford for our payment to go up by $800 per month, what options do we have?

A: The option is to sit tight. We’re seeing inverted bond yields which means the shorter-term bonds are higher rate than the longer-term bonds. Generally, when we see that we tend to go into a recession. When we go into a recession, we see rates to come down. If your payment is really hurting you, then you might think about re-amortizing your mortgage to a longer term. If you do believe rates are going to come down, it may be worth it to switch to a variable rate mortgage so that when rates do come back down you can lock in at a lower rate.

Q: We’re getting married in summer 2024 and currently living with our parents for free but we’re struggling to decide whether to buy in 2023 or in 2024, what do you think?

A: We’re at an interest rate high, so your costs are extremely high. A lot of young people are sitting on the sidelines waiting to buy a home when rates to come back down. When rates do come back down there will be limited inventory as all these people jump on buying. My advice to my niece who’s in a similar situation is to stay at home as long as you can while it doesn’t cost you anything.

Q: If we’re heading into a recession and mortgage rates do fall, should we opt for a 1 or 2 year mortgage on our renewal in January?

A: Generally speaking, if you take a 1 or 2 year it’s generally lower rate than a 5-year, but today you’ll see that it is very similar to the 5-year. If you do believe interest rates are coming down, then a 1 or 2 year will give you an out sooner if they do.

Q: I’ve just separated from my husband and would like to keep the matrimonial home however my bank tells me that without a final separation agreement, they can’t assist me, are there other options?

A: There are other options, but they might be more expensive from a private lender. However, banks do require the agreement to be a notarized agreement as there has been fraudulent cases in the past so there is no way to get around that. There are options out there, just give a mortgage broker a call and they can provide you with some options that are out there.

For more information, reach out to a Mortgage Broker today!

To watch the full CTV Morning Live segment with Frank Napolitano; click here