First of all, a very merry Christmas…and all the best for 2023.

This has been a tough year with severe rate hikes for those of you in a variable or adjustable rate mortgage. Rate hikes are the only tool the Bank of Canada has to bring inflation down to its 2% target rate. Today the inflation rate is still around 7%. The Governor has indicated that he will continue on this path until the rate is in line. 

What does this mean?

It could mean more hikes next year. While I believe eventually, the rate will come down, that does not help in the short term. 

Here are some possible solutions.

  1. You can switch to an optional payment mortgage. This doesn’t mean you don’t have to make payments, but you can pay as little as just interest (about a 20% discount on your current payments), or you can pay any additional amount if you have the spare cash, and you can change the amounts monthly to better fit your budget. 
  2. Some lenders today are offering 4.99% for a five-year fixed rate. This is lower than most of the variable rates today and would be much lower if there were more hikes.

If locking into a rate for the next five years interests you, there are two things you should do.

First, call the institution that holds your mortgage and requests their best lock-in rate. If it is not where you think it should be, there is option 2, call me.

Of course, I am always available to chat by Text, Email or Phone, so if you have any questions, please reach out.