Welcome to 2024

The best many Mortgage Agents can say about 2023 is that they survived. Mortgage volume declined substantially as home sales plummeted in many areas. If you became a Mortgage Agent in the last 10 years you were in for a rude surprise.

More than a decade of unnaturally low interest rates had supercharged the housing market, offered the opportunity to cash in on increasing values and made it possible to start to amass a real estate investment portfolio. Money was virtually free! Mortgage volume soared!

Then came Covid-19, the post-covid government spending boost and the corporate profit grabs which, inevitably led to higher inflation followed by high interest rates.

Those with variable rate mortgages were impacted the most, but those who had to renew, sell or move were also hit by higher rates.

It won’t make you feel better that rates are just back to their long term levels because prices are substantially higher than the 1970’s and 1990’s.

So what can we do in 2024?

First don’t panic…plan. Secondly, talk to your bank and your Mortgage Agent well before you decide what to do. Each of these has a different approach but you will decide the right one for you.

If you have an existing mortgage coming up for renewal start 6 months out to explore your options. You won’t be able to lock-in to anything until 90 days prior to renewal, but this will avoid last minute panic actions.

Be realistic…you will be paying more upon renewal. How much depends on many factors your trusted advisor will discuss with you.

If you are looking to buy you still need to start early to get financing in place. Again a Mortgage Agent will be a big help, so reach out before you engage your Real Estate Agent.

Most pundits predict rates will start to decline in 2024, perhaps as early as Q2, but they will not decline at the same rate they increased. It is also unlikely rates will go as low as they were in 2008 to 2022, unless the economy goes back into freefall again…which we don’t want.

About 45% of Canadian mortgages renew over the next 2 years, so it will be painful for many of you. Please take a longer term view in that each year you are, hopefully, moving slowly closer to owning your home without a mortgage.

I’m Steve Willson, A Mortgage Agent with Mortgage Alliance in Ontario. I’d be glad to discuss your specific circumstances whenever you need. You can reach me through stevewillson.ca

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