Knowing how to manage your money can often feel like a balancing act, especially when it comes to mortgages. As interest rates continue to rise, figuring out how to maintain your current and future payments may seem like a daunting task.
Fortunately, it doesn’t have to be.
In this article, we have put together the following guide to help you easily navigate rising mortgage rates while remaining ahead of your money issues.
1.Be mindful of deferring your payments
Buying now and paying later might seem like a good idea at first, but it could result in making increased payments down the line. Once the time comes to make your delayed payments, the interest rates can often be higher than when you originally invested. If you decide to take advantage of a deferred payment plan, it’s important to ensure you can afford to make higher payments, some of which may be larger than advertised.
Financial forecasts are typically based on the current interest rates and do not take into account how the market may change in the future. This tactic is used to promote the best rates available for present buyers. However, if you’re not careful, a deferred payment plan could lead to you paying even more when mortgage rates rise later on.
Our team at Northwood Mortgage has extensive knowledge surrounding the ongoing mortgage rates in Toronto. With experts specializing in all types of mortgages, you can easily receive support managing your money when mortgage rates begin to rise.
2.Confirm your mortgage payments are affordable
When deciding to start paying a mortgage, it’s essential to ensure the payments suit your current needs. Making higher payments than you can afford not only can impact your finances at the beginning, but will also make it more difficult to manage rates when they increase.
When interest rates begin to rise, you will most likely end up renewing your mortgage at a higher rate. While this may take some time—often several years—when it does happen, you want to be in a position where you can continue making your payments. Planning ahead ensures you have more control over your mortgage in the future, making it easier to manage your money when mortgage rates eventually rise.
Whether you’re looking for an affordable fixed rate or a variable one, our team of mortgage experts will work with you to find the best solution that suits your needs. Our extensive knowledge of the current mortgage rates in Toronto and future trends allows us to recommend the best options for you.
3.Pay off your debt as quickly as possible
The best way to manage your money when mortgage rates rise is to pay down your debt as much as possible. Although this may seem like an obvious solution, it’s one that many people often neglect when making investments. When you have less debt, it typically allows you to pay off your mortgage faster. This can relieve the financial strain you experience down the line when interest rates rise, which, without proper planning, could lead to bigger loan payments.
As mortgage experts, we recognize that mortgage rates are one of the major factors when considering a mortgage or refinancing. The higher the interest rate, the more you pay over time in terms of total payments. Our team is knowledgeable about mortgage rates in Toronto, making it easier for us to match you with the option that best meets your financial needs.
How to Start Managing Your Money
Contact one of our professionals today to find the best mortgage solutions and learn how you can manage your money when mortgage rates in Toronto rise. You can call Northwood Mortgage at 416-969-8130 or contact us here.