Should you refinance your mortgage with todays high rates?

Refinancing your mortgage can be an excellent way to pay off high-interest credit card and other consumer debt, improve your household cash flow, complete projects/home renovations, contribute to your retirement plan or children’s education, and many other purposes.

We have dedicated ourselves to education over the last 20 years as Canadians prior to understanding the true cost of borrowing believed rates should be the primary focus, but not the be-all-end-all, and does require some perspective.  I write all about this in my book, The Mortgage Code – that can be purchased here on Amazon or Audible.

We had one client when purchasing the family home say “I’d sell my mother-in-law to save an extra 0.25% on my mortgage rate.”

However, after 5 or 10 years of being a homeowner, there are almost always unforeseen expenses such as, but not limited to, kids, pets, repairs, family, bills, and the list goes on and on and on.   When you are facing high consumer credit card balances and interest rates, we will argue that cash flow becomes the top priority and not the mortgage interest rate.  While mortgage rate will always be a factor, it becomes less and less important.

In 2023, inflation and rising interest rates have put so much pressure on household budgets (especially if you have a variable or adjustable rate mortgage).

If your home has increased in value and you have enough equity in your property, you may be able to consolidate all of your debt into a new mortgage and help your household cash flow.

Keep in mind, that there will be costs associated when refinancing your mortgage.

1.  Your existing mortgage will most likely have at minimum a 3-month interest penalty

2.  There may and most likely be a legal cost to re-register the mortgage.

3.  An appraisal may be required

4. Long-term interest costs.  In most refinances, more time will be added to the mortgage, the mortgage payment will increase to accommodate all of the debt payouts and the long-term interest cost will also increase.

You will need to weigh the costs and the benefits to see what is right for your own personal situation.  However, if you can free up $1,000 – $3,000 per month in household cash flow, it could be a real benefit to your family and their lifestyle.

Contact us directly to learn what is possible and specifically applicable to you.

Example of current rates *OAC:

5-year fixed insured: 5.39%

5-year conventional: 5.94%

5-year variable Insured – 6.30%

HELOC:  Prime + 0% or 7.20%

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

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