Bullet Point News is pleased to welcome Nash Malik, our new correspondent who will be covering mortgages in an increasingly challenging lending environment. He has been a mortgage agent since 2016 and is currently a Mortgage Architects team leader here in Stouffville.
Following abundant government spending during the COVID-19 pandemic, resulting inflation compelled the Bank of Canada to rapidly raise its policy interest rate from 0.25% to 5%.
As an extension, the bond market, a leading factor dictating fixed-rate mortgages, has also been on the rise, and those mortgage rates have followed suit.
While variable-rate mortgage holders are already feeling the impact, those with existing fixed-rate mortgages are inching ever closer to their renewal dates.
The sticker shock on those renewals can be intense, as Malik is seeing typical $500,000 mortgage holders facing 30% to 50% increases in their payments.
The Canada Mortgage and Housing Corporation released a recent report showing the number of Canadians falling behind on their mortgages has risen by 33% since last year. However, this demographic only represents 0.08% of Canadian mortgage holders.
“If you look at the macro perspective, people are getting by,” Malik tells us. “Canadians are pretty resilient right now.”
Those facing challenges making payments can consider renting basements, Malik suggests, or stretching payments by extending amortization periods. He has also been helping clients looking to access financial assistance from parents and family who have already built equity and paid off their loans.
But it’s not all doom and gloom, according to Malik. Bond yields are beginning to dip slightly, which has lowered fixed rates in recent weeks.
While interest rates are up, he believes the Bank of Canada intends to pause instead of continuing with increases. “I don’t have a crystal ball… but I think we’re heading in the right direction,” Malik suggests.
For those facing upcoming renewals, mortgage brokers can be invaluable in identifying and locking in the best mortgage. Malik has access to over 60 different banks where he can compare rates and policies to find the best fit for clients.
“Sometimes larger banks only have that small box they are trying to fit everyone into, while mortgage brokers offer greater options,” Malik explains. “A broker is a great way to help navigate all of this. It’s a one-stop shop where we can work with all the big banks, alternative banks, and even private lenders.”
Readers can see our interview below, and anyone interested in connecting with Malik can check out his website, send him an email, or visit him in the Gormley Centre at Woodbine and Stouffville Road.
