For most people, the largest asset that they own is their home, and the largest liability they have is their mortgage. When you understand how to manage your personal finances effectively, you usually are more financially successful! The social and emotional consequences will have a positive effect on you!
Given the current real estate market, here are a few tips to help you navigate current interest rates and home prices to get ahead in 2022!

1. Variable-rate versus fixed-rate mortgages –which one should I choose?

The U.S. Federal Reserve is expected to make 4-6 rate increases in the next year, which will make is easier for the Bank of Canada to follow suit. We shouldn’t be surprised as the bank prime rate before the pandemic was close to 4%. Remember the overnight lender rate affects variable-rate mortgages and most of our readers have a rate that is prime minus a certain percentage. Fixed-rate mortgages however are affected by the bond markets and five-year bond yields have risen primarily because inflation has been trending higher. If you’re feeling tense about where rates are heading a five-year fixed rate is always a good choice. Something to consider when you go with a five-year fixed rate is that the amount you will pay will be significantly higher than a five-year variable though rate mortgage. As rates rise you will likely find that they’ll plateau and you may be further ahead in the long run with a variable rate mortgage.

2. What happens if my mortgage renews in the next 12 months?

If your mortgage renews in the next 12 months, get ahead of the rates and call us now, and don’t wait for your existing lender to contact you as you’ve probably already missed the opportunity to get a better rate. If you are a client of The Mortgage Centre, we mail and call you as a proactive measure to help. Don’t ignore our efforts. There’s a reason why we’re contacting you early!

3. What happens if I’m not paying off my credit cards or lines of credit each month?

Contact us immediately to look at a strategy to pay off your debts and improve your cash flow. If you’re not paying off unsecured debt monthly be proactive and look at options to consolidate the debt into your mortgage. Prolonging exploring this option when rates are set to continue to rise can mean you’re missing out on a good opportunity to pay off debt and secure a rate now.
Explore what your options are by booking a no-obligation virtual call with us. Remember; be proactive about your mortgage and your debts. We’ve helped many of our clients pay off their mortgages and debts and improve their financial profile simply because they decided to take our advice and reach out!
© Sandra Lastovic is the Principal Broker with the Mortgage Centre in Guelph and services the Kitchener/Waterloo/Cambridge markets as well. With over 20 years’ experience and holds a M.Sc. from the University of Guelph. She has consistently ranked in the top one percent of mortgage agents in The Mortgage Centre Canada network. She can be reached at 519-763-3900 x1001 or