Upcoming mortgage renewals causing big price increases

Dawley said she feels grateful to be in a situation where she isn’t at risk of losing her home or something drastic, but the hundreds of extra dollars a month will come at a cost.

“You need a home over your head so the sacrifices are going to have to come out of other things. You might not be able to splurge on Christmas for your kids, you might not be able to buy them those shoes that they need or want,” she said.

While Dawley is facing a rate increase, she actually found a way to save hundreds of dollars too. Explaining that she wasn’t happy with the rate her bank gave her, she said she shopped around and found a different lender which resulted in close to a 2% rate decrease, which created big savings. Mortgage expert Christine Buemann says everyone should take the time to shop around, as navigating rising costs is difficult enough on its own so the savings you could earn through a lower rate will make a big difference.

“It’s more important than ever to not just sign the renewal letter. They will often send you an offer, and the thing is, it’s easy to just sign the renewal letter because you don’t need to requalify. You don’t need to send in any bank statements or any paystubs. However, you could be leaving a lot of money on the table. Also, it could cost you more in the long run if you’re signing into a product that’s not actually in alignment with what’s best for your situation,” Buemann said.

As far as what agreement you should consider taking, Buemann said everyone’s situation is different so she can’t offer a one-size-fits-all solution. However, she noted many are taking shorter mortgage plans despite higher rates, as Buemann anticipates lower rates are on their way in several years.

If you’re financially able, Buemann recommends incrementally increasing your monthly payments. Even if it’s just an additional $25 a month it could pay off in the long run.

“Start making extra payments,to start becoming accustomed to paying more and also lowering that balance as much as you can so that when you’re working in a high rate environment you’re running at the lowest balance possible,” she said.

Mortgage renewals are just one of many things causing headaches as far as rising costs are concerned, but savings can potentially still be had with careful planning and shopping around.

by Tommy Osborne

Upcoming mortgage renewals causing big price increases

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