Well the word is out… Canada is in a technical recession…so what does that mean for Canadian mortgage holders? The main question that I have been asked is, “how will the recession impact interest rates or my mortgage?”
For those currently in the middle of a mortgage term, there will be minimal to no impact on your mortgage. If you have a fixed rate mortgage, nothing will change as long as you continue to make your mortgage payments. If you have a variable rate mortgage, this will likely work in your favour for at least a little longer.
With rates staying low, it is a good time to take a look at your current mortgage term to see if there is an opportunity to restructure your financing into something that is going to take advantage of the low rates.
Currently looking at purchasing a new home? The main concern with a recession is an impact on employment. If there are changes to your employment, it is important that you review these changes with your Mortgage Broker. Not expecting there to be any changes? Then, just like those that currently have a mortgage, take advantage of the low rates and make sure you understand the fine print in the mortgage contract that you are signing up for…especially the details about pre-payment penalties.
Thanks to my DLC colleague Nathan Lawrence for this article.