Interest rates are going up, and it’s causing all kinds of problems. You may feel helpless, you may feel screwed, and those are valid feelings.

However, there are game plans for these type of things. You might not be able to make it go away, but you can help yourself out.

Why Do Interest Rates Rise?

@hackandcompany Reply to @newsta007 unfortunately rising interest rates are the symptom but inflation is the problem.. #interestrates #inflation #realestate ♬ IMPERIAL PIANO - Treia Music

Interest rates are symptom, not the problem, and the problem is inflation.

These rates are driven by supply and demand, and the supply and demand is for credit. When you borrow money, there’s an inherent risk to the lender that you won’t pay it back, and then they’ll be out of that money. Their reward for lending you this money is interest. When times are good, you’re more likely to pay it back because you have the means to do so, so the interest rate is low. When times are bad though, it’s more difficult for the average person to pay back what they owe, so interest rates go up to deter people from borrowing if they can’t afford it.

Here’s What You Can Do:

1. Prepare to prepare! At minimum, at least one year before your mortgage goes up for renewal, check the interest rates, calculate what your payments would be, and use that 12 months lead time to make lifestyle changes.

2. Right now, if you have less than 2 years left on your mortgage, you may want to consider what it would like to get a longer term (5, 7, or even 10 years). Would you prefer to pay out the penalties in order to get into a longer term of safety at the current rates?

3. Ask your mortgage professional about products that have portability options, because not all of them have this option.

4. Ask if the mortgage can be assumed. People with good mortgage deals may get better deals when selling their house is they can sell it with the mortgage when rates get higher.

5. Consider paying off your debt before interest rates go up. Student debt, credit card debt, line of credit debt, etc., will be affected. If you pay down debt before interest rates rise, it will be easier to handle in the long run.

Do you have a lender that you know and trust?

If you have concerns about making your payments, we know some great people you can talk to!

Interest Rate Relief

Interest rate relief has not been announced yet by the government, but we’re watching for it! Check back soon as we’ll update as it’s rolled out.

Should I Wait to Buy a House?

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You can either pay the market, or you can pay the bank.

You can pay the market right now by locking in a lower interest rate. If you wait until later, the houses may be cheaper, but you’d be paying the bank with more interest. The market may give your money back to you, but the bank never will.

If you’re trying to understand if you can get the amount you need from the sale of your house, in order to buy your next one, we can help you make that decision.

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