Kingston Mortgage Solutions share tips on dealing with increased interest rates

*Paid Business Feature*

Photo by Karolina Grabowska.

By now, most Canadians are feeling the effects of lingering inflation, as well as 10 Bank of Canada increases in Prime rate. Instead of the Blue Jays or the weather, higher gas, grocery, and housing costs are the subject of our daily conversations — and frankly our collective concern.

More specifically, whether you are a first time home buyer, perhaps hoping to refinance, or you just received your mortgage renewal offer from your lender, one thing is clear — mortgage interest rates have increased substantially. So what to do about this? Here are some suggestions for you to consider:

Work with a competent, knowledgeable mortgage professional to fully understand your personal situation.

Whether buying, renewing, or refinancing, a mortgage professional will compare various rates, terms, prepayment privileges, amortization periods, etc., and ensure any solution suggested is right for you and your family. A mortgage broker represents many different lenders (not just one), and will ensure your needs and budget are put at the forefront of any recommendation. Remember, financial planning includes your mortgage!

If you have an existing mortgage, take full advantage of your prepayment privileges.

Many clients do not realize that you can prepay 10, 15, or even 20 per cent of the principal mortgage balance without penalty annually. These extra payments instantly reduce the amount owing and the corresponding interest paid, they shorten your amortization period, and leave a smaller mortgage balance at renewal. You can also increase your regular payments to help accelerate your mortgage paydown, and even pay more frequently as well. Check with your broker or lender to determine what your particular mortgage allows. 

Manage, minimize, and eliminate debt.

Many times, clients are not approved because their debt servicing ratios are outside the accepted guidelines, and often this is because they have purchased an expensive vehicle or they are living beyond their means, accumulating large credit card balances. Consider making and committing to a budget, paying down debt as quickly as possible, and ensuring you maintain all your payments on time, so as not to negatively affect your credit score. 

Consider a second mortgage.

During COVID, interest rates were very low, so it may make sense to take out a second mortgage to consolidate debt, pay off a car, etc., instead of breaking your low-cost first mortgage. Often, we can coordinate maturities of the first and second mortgages, so that both can be paid out at maturity, avoiding penalties, etc. Some second mortgages now are offered at lower rates than you might expect by mainline lenders, so a conversation to fully understand your options is warranted (and free!).

Speak with one of our professionals today. Visit to learn more or get in touch.

David Sutherland is the Principal Broker at Kingston Mortgage Solutions. 

This article is sponsored by Kingston Mortgage Solutions. Interested in a Business Feature on Kingstonist? Contact [email protected]

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