What should I do about my mortgage renewal? If that is your question, one answer is: turn to an experienced mortgage agent for help, guidance and a variety of lending products.
The Bank of Canada is not changing its key interest rate of 5%.
“In Canada, there is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures,” the Bank of Canada said in a statement.
“Consumption has been subdued, with softer demand for housing, durable goods and many services.
The news was greeted with one measure each of relief and caution from Shaun Westlake, VP, Sales, Guiding Star Mortgage Group.
“Yes, relief, for sure,” said Westlake. “Clients have roamed a dramatically changed and changing mortgage field in Canada already this year, and it has been difficult, both financially and psychologically.”
Westlake said the announcement of no change in the Bank of Canada’s central rate, coming on the heels of a similar pause last month, injects a dose of certainty into the market. “Certainty is better than uncertainty, even if the cost of that certainty is higher than it was a year ago,” he said. “Certainty gives you something to dig into and build from.” In June 2022, the Bank’s key rate was 1.5%.
Now, the interesting question
Westlake said consumers shouldn’t get swept up in all the headlines or even the expert commentary in the media.
“When the Bank of Canada makes its interest rate announcements, a lot of the expert commentary is, really, backward-looking,” he said. “We are told about what the rate was a year ago, how many rate spikes and pauses there have been this year, what inflation was last month, and so on.”
The question for consumers to ask now, Westlake said, is: what will I do moving ahead to make my mortgage situation better?
“There is only so much value in looking back, especially if you are a mortgage holder facing renewal in the next few years,” he said. “But there is something positive you can do. With the help of a seasoned mortgage agent, you can face the future. You can fashion it and bend it a bit in your favour.”
Westlake added: “If you have such a professional mortgage agent in your corner, keep them close. If you don’t, now is good time to find one.”
Here’s a helpful primer video, courtesy of Guiding Star Mortgage Group, on the mortgage landscape that all renewal consumers will face over the next few years. Watch it or share it with a family member, friend, or colleague who might be facing the common mortgage-renewal situation it describes.