I’ve been having a lot of conversations lately that all seem to start the same way: “Is my mortgage still working for me?” And honestly, it’s a really good question especially right now.
If your monthly budget feels a little tighter than it used to, you’re not alone. Many Canadians are noticing that everyday expenses are taking up more of their cash flow. A mortgage check-up can sometimes uncover options to help reduce monthly debt payments, improve flexibility, or create a little more breathing room in your budget.
With the cost of living still higher than it was a few years ago, and with a large number of Canadians coming up for renewal after locking in ultra-low rates during covid, more people are taking a step back to reassess, as their cost of living is most likely going to increase further on their renewal. These costs have increased not due to their own spending but because the changing political and economic environment.
As consumers face these rate increases, I have been getting a lot of questions about why rates seem to move around so much, so I wanted to give you a bit of simple context. Mortgage rates aren’t random, even though it can feel that way. Fixed rates are largely influenced by the Government of Canada bond yields. When those yields rise, fixed mortgage rates usually follow, and when they fall, rates often ease. Those movements are tied to what’s happening in the economy. Metrics that affect those bond rates include metrics such as growth, spending, and inflation. Variable rates are a bit different, as they’re tied to the Bank of Canada’s policy rate, which is adjusted to help manage inflation.
It’s also worth remembering that your mortgage is more than just your rate. Your payment structure, flexibility, amortization, and ability to adjust over time all play a role in how well it supports your life today. The right mortgage isn’t about chasing the lowest rate. It’s about finding the right balance for where you are now and where you’re going.
Knowing how and what your mortgage can do for you can go a long way to helping handle the increased cost of living. A quick review doesn’t mean making a big change. In many cases, it’s simply about getting clarity. It will help you understand how your current mortgage compares to today’s options. If your renewal is coming up, it ensures you’re aware of how this changing environment affects you so you’re not pressured or stressed later. It may even help you identify ways to improve cash flow or flexibility, and help you tackle the increased cost of living expenses you may be facing.
Remember, if you’re looking to purchase or make a move, a pre-approval can insulate you against fluctuations and help you plan out your expenses before starting the search, and lets you shop with confidence.
We also have another Bank of Canada rate announcement coming up on April 29th. I’ll be watching it closely and keeping you informed on what it means and whether it could impact mortgage rates or strategy. These updates can create opportunities, and it’s always helpful to understand what’s changing and why.
If you’ve been wondering whether your mortgage still fits your life today, I’m always happy to take a look with you. Feel free to reach out anytime.