11 Dec

Refinancing Your Mortgage in 2025

General

Posted by: Ryan Roth

Refinancing your mortgage can be a smart financial move for many reasons, and as your trusted mortgage advisor, I’ve seen how much it can benefit homeowners!

Ideally, refinancing is done at the end of your mortgage term to avoid penalties, but the timing can vary depending on your goals. For some, it’s about unlocking the equity in their home to fund renovations or cover big expenses like college tuition. For others, it’s an opportunity to consolidate debt, lower their interest rate, or change up their mortgage product.

Let’s take a closer look at some of the ways refinancing your mortgage can help!

  • Get a Better Rate: As interest rates have continued to decrease with the Bank of Canada updates these past few months, now is a great time to consider refinancing for a better rate and lower overall mortgage payments!  Some economists anticipate the Bank of Canada will move to have the overnight rate down to 3.25% by year-end and potentially down to 2.25-2.75% by the end of 2025.
  • Consolidate Debt: When it comes to renewal season and considering a refinance, this is a great time to review your existing debt and determine whether or not you want to consolidate it onto your mortgage. In most cases, the interest rate on your mortgage is less than you would be charged with credit card companies or other forms of financing you may have. Plus, having all your debt consolidated into a single payment can keep you on track!
  • Unlock Your Home Equity: Do you have projects around the house you’ve been dying to get started on? Need funds for a large purchase such as a new vehicle or post-secondary education? When you are looking to renew your mortgage, it is a great opportunity to consider refinancing in order to take advantage of the home equity you have built up to help with these larger changes in your life!
  • Change Your Mortgage Product: Are you unhappy with your existing mortgage product? If you have a variable-rate or adjustable-rate mortgage, you may be considering locking it in at the lower rates. Alternatively, you may want to switch your current fixed-rate mortgage to a variable option with the interest rates expected to continue decreasing into 2025. You can also utilize your refinance to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

PLUS! Some latest changes by the Government of Canada will make it even easier for you when it comes to your renewal and refinancing options:

  • Those of you who may have an uninsured mortgage will no longer have to pass the stress test as of November 21st. This means that you have more flexibility when it comes to rates and mortgage products in renewal cases where you wish to switch lenders without adding additional funds to your mortgage!
  • Beginning January 15, the federal government will allow default-insured mortgages to be refinanced to build a secondary suite. If you’ve been considering adding a suite to your property, you may be eligible to access up to 90% of your home’s equity for this purpose.

No matter your plans or situation, please don’t hesitate to reach out to go over all options.

2 Dec

Resolutions for Your Home and Finances

General

Posted by: Ryan Roth

As the new year approaches, it’s a natural time to reflect on our personal goals and set resolutions for the months ahead. Your home and finances are key areas where small, intentional changes can lead to big improvements in security, stability, and quality of life.

Here are some resolutions to get you started.
Create a Realistic Home Budget

A well-planned budget is essential for financial peace of mind. Whether you’re new to budgeting or want to refine your approach, creating a realistic budget helps prioritize spending, track bills, and put money toward meaningful goals.

  • Identify Fixed and Variable Expenses: List out fixed costs, like mortgage payments, utilities, and insurance, as well as variable ones, such as groceries and entertainment.
  • Set Savings Goals: Include savings as a “non-negotiable” in your budget, earmarking funds for home repairs, investments, or emergencies.
  • Track and Adjust: Track spending throughout the month and adjust where necessary. Financial apps like Mint or You Need a Budget (YNAB) make it easier to stay on course.

Set Goals to Build Home Equity

Building home equity is a key path to increasing net worth. Whether you’re planning to sell or stay in your home long-term, building equity can offer financial flexibility and security.

  • Make Extra Mortgage Payments: Even a small additional payment toward your mortgage principal each month can shorten your loan term and reduce interest costs. A biweekly payment plan is another effective method to pay down the principal faster.
  • Consider Strategic Home Improvements: Invest in upgrades that boost home value, like kitchen and bathroom remodels, or energy-efficient upgrades like new windows or solar panels. Prioritize improvements that add the most value to your property.

Develop a Plan to Pay Down Debt

Paying down debt (especially after the holidays!) can help free up cash flow. It is key to focus on high-interest debts first, such as credit cards, to maximize your payments.

  • Use the Debt Avalanche or Snowball Method: The avalanche method involves paying off high-interest debts first, while the snowball method focuses on smaller debts first. Choose the one that best fits your motivation style
  • Consider Refinancing or Consolidation: If you have a high-interest mortgage or multiple debts, refinancing or consolidating might reduce interest rates, making debt repayment more manageable
  • Celebrate Milestones: Paying off debt can feel challenging, so celebrate progress. Every milestone achieved brings you closer to financial freedom.?

Commit to Energy Efficiency to Lower Bills

Saving on energy costs can have a significant impact on your budget, especially in colder or warmer months. Simple changes around the home can save you money while benefiting the environment!

  • Invest in Smart Thermostats: A programmable thermostat can automatically adjust heating and cooling based on your schedule, saving energy when you’re not home.
  • Switch to LED Lighting: LED bulbs use significantly less energy and have a longer lifespan than traditional bulbs.
  • Insulate Windows and Doors: Adding weatherstripping to doors and windows keeps drafts out, making your heating and cooling systems more efficient.

Review Your Insurance Policies and Coverage

Insurance is a key element of financial security, but it’s easy to forget about it until something goes wrong. As you head into the new year, this is a great time to make sure you’re fully covered!

  • Assess Homeowners and Mortgage Insurance: Review coverage limits and ensure your policy covers potential risks, including natural disasters if you live in high-risk areas.
  • Shop for Better Rates: Contact your provider for discounts or shop around for new rates. Bundling policies, like home and auto insurance, can often yield savings.
  • Update Beneficiaries and Coverage: Life circumstances change, and your insurance should reflect that. Update your beneficiaries, adjust coverage, and ensure policies align with your financial goals.

Setting resolutions for your home and finances doesn’t have to be daunting! Start with small, actionable goals to help transform your finances – and your mindset – for 2025!