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Navigating High Mortgage Payments

Writer's picture: Molly GomesMolly Gomes

Even with the slight relief we have seen in mortgage rates over the last few months, many Canadians still have higher than comfortable monthly mortgage payments, and they're getting creative as they maintain their goal of homeownership


Here are some of the most common approaches we've found for Canadian homeowners:


1. Decreasing Spending in Other Areas

A significant 39% of homeowners are opting to cut back on non-essential expenses. This includes reducing discretionary spending on entertainment, dining out, and vacations. By tightening their budgets, they can allocate more funds toward their mortgage payments.


2. Making Accelerated Mortgage Payments

Many homeowners are choosing accelerated payment options, such as weekly or biweekly payments. This strategy allows them to make the equivalent of one extra monthly payment each year, helping to pay down their mortgage faster and save on interest over time.


3. Increasing Amortization Periods

Some homeowners are extending their amortization periods to lower their monthly payments. While this approach can ease immediate financial pressure, it’s important to note that it may result in paying more interest over the long term.


4. Using Prepayment Privileges

Homeowners are taking advantage of prepayment options available in their mortgage contracts. By making lump-sum payments or increasing regular payment amounts, they can pay down the principal faster, reducing the overall interest paid.


5. Dipping into Savings

Approximately 9% of homeowners are planning to use their savings to cover increased mortgage payments. This can provide a temporary cushion, but it’s essential to consider the long-term impact on financial security.


6. Refinancing to Consolidate Debt

Some homeowners are exploring the option of refinancing to pull out home equity. This can help pay off high-interest debts, potentially reducing overall monthly payments and improving cash flow.


7. Shopping Around at Renewal Time

Homeowners are increasingly turning to mortgage brokers to explore options from multiple lenders during renewal time. This proactive approach allows them to seek better terms and lower rates, ensuring they get the best deal possible.


8. Creating Additional Income

Finding creative ways to generate extra income is another strategy homeowners are adopting. Renting out part of their home or even parking spaces can provide a valuable financial boost to help cover mortgage costs.


9. Seeking Professional Advice

Many homeowners are consulting with mortgage professionals earlier in the renewal process. By exploring options and locking in rates before potential increases, they can make informed decisions that benefit their financial situation.


If you're up for renewal in the next 3-6 months, get ahead of the game and reach out to your mortgage lender today.




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