The Rocky Road Ahead for Your Mortgage This episode examines the current economic outlook, and it is not too pretty. High inflation is the problem the Bank of Canada is prioritizing, which is why interest rates are rising, which is why stock prices are falling and home ownership is more expensive. What is the next domino to fall? Maybe housing prices? Have a listen to learn more! Some key takeaways to consider:

1. Refinance your unsecured debt while home prices are high. If real estate values fall, this will reduce the amount you can borrow against it and reduce the amount of unsecured credit you can wipe off your bureau. So act soon if you are in this position.

2. What might this lead to? A take off in the home equity loan market! A lot of people took advantage of rock bottom interest rates two years ago and refinanced their debt. If qualified borrowers need more money now, they may find it is in their best interest to just take a second mortgage at a higher interest rate than refinance the whole mortgage to access more equity at today’s 5-year fixed or variable rate. If you are a qualified borrower and need to access more funds, speak to a Cannect agent to see whether a second mortgage or a complete refinance is your best path to long-term savings.

3. “Don’t fight the Fed” With the Bank of Canada’s priority being to bring down inflation, rates should continue to rise and asset prices should continue to fall. If they fall so much that the BoC has to shift their priorities, their actions will reflect this change. Interest rates may drop back down again and, subsequently, asset prices would rise back up. The BoC has fires to put out, and the way they decide to do it will shape the economy for the foreseeable future.

Marcus Tzaferis and the Cannect Team