'Harder than anything': Ontario family's mortgage payments to increase by more than $2,000
More than two million Canadians will renew their mortgages over the next year-and-a-half. CTV News asked more than 50 mortgage brokers across Canada how to get the best mortgage deal. This is what we found.
An Ontario mother said her mortgage payments are about to practically double – translating to more than $2,000 extra per month if interest rates don’t dip on Wednesday – and it’s “harder than anything” she’s ever faced.
“You're asking for $2,100 to just be pulled out of the sky and still afford all of my kids' medical needs,” Shawna Wood, a 40-year-old mother of eight children – half of whom have health challenges – told CTV News.
After renting a house in Oro-Medonte for a decade, the family of ten bought the five-bedroom house about two hours north of Toronto for $800,000 in 2021. At the time, they locked in a 3.2 per cent fixed rate for three years.
Like many Canadians, Wood secured historically-low interest rates during the COVID-19 pandemic. But at the end of the month, her mortgage is up for renewal, which means she’ll be watching the Bank of Canada’s interest rate announcement on Wednesday like a hawk.
She said the bank offered her a 7.1 per cent renewal rate, which would translate to a leap from $3,000 to $5,100 per month for mortgage payments.“It makes you sick,” she said. “We worked so hard to be first time home buyers.”
Her husband has increased his workload from 50 to 70 hours a week. In anticipation of the impending interest rate announcement, Wood said she and her husband explored leaving the province, selling the house, and refinancing it.
“I’m praying it’s a decrease and not another hold,” she said, in reference to the Bank of Canada’s decision to keep its key interest rate steady at five per cent in April.
Shawna Wood and two of her children pictured outside their family home in Oro-Medonte, Ont. “I just keep praying and praying and praying it comes down even just 0.25 per cent. I know that doesn't sound like a lot but when you're looking at the large mortgages that people have, it really makes a difference of a few hundred dollars,” Wood said.
At a rural home in Cameron, just north of Lindsay, Ont., Heather Weatherill and her husband are nine years into their 10-year fixed rate.
Their current rate, 3.06 per cent, won’t happen again, Weatherill admitted, but she’s hoping the interest rates drop – “even a little drop would help,” she said.
Ontario resident Heather Weatherill and her husband are nine years into their ten-year mortgage period in Cameron, Ont.Much has changed in the 65-year-old’s life in the last decade. She retired as a nurse last November and her husband’s salary as a commercial insurance broker was recently sliced in half while he’s at home on dialysis waiting for a kidney transplant.
“It’s stressful,” Weatherill said. “And then when you have the money issues on top of that, it’s stressful.”
The anxiety surrounding mortgage payments appears to be broadly felt. Like Wood and Weatherill, about a quarter of respondents to a Canada Mortgage and Housing Corporation survey expressed worry about their ability to make their monthly mortgage payments.
Of the fifty mortgage brokers CTV News contacted for advice, the five based in Toronto unanimously agreed a fixed mortgage was the safest route.
The predictability of a fixed rate outweighs the potential of variable rates dropping, Toronto mortgage broker Marlon Valencia said. “Only when the client can accept risk and has a strong fall back, that’s when I would recommend a variable term.”
However, Valencia said that doesn’t mean an individual with a variable mortgage should get out of it – unless they absolutely cannot afford their monthly payments.
“Many variable rates allow you to fix your rate for free as long as you extend your term,” Valencia explained. “It would be a shame to have them fix it right near the end of the higher rate environment. If they can, I would wait.”
For Wood, these are the questions she goes to bed at night thinking about, and wakes up in the morning with them still on her mind.
“You dwell on it 24 hours a day, on top of everything going on,” she said.
“There is no eating out. There is no sending your kids to camp because you have this gigantic mortgage increase that is sitting and weighing on us and the kids are the ones who suffer.”
Responses to CTV News' Mortgage Broker Questionnaire
Broker Name: Marlon Valencia
Broker Company: Choice Financial
Note: All questions are based on a typical Canadian household renewing a mortgage.
Question #1: What is the best type of mortgage to have right now?
VARIABLE RATE | FIXED RATE | IT DEPENDS |
X |
I would say a three-year fixed is the safest option. Although the variable rate is likely to drop, its not guaranteed to drop. If the client is looking for the best predictability, I would personally choose a three-year fixed. Only when the client can accept risk and has a strong fall back, that’s when I would recommend a variable term.
Question #2: What is the best rate you can get right now? (Specify rate and term length)
VARIABLE RATE | FIXED RATE | IT DEPENDS |
6.15% insured | 4.69% five-year fixed |
Question #3: Should I get out of my variable mortgage if I have one?
YES | NO | IT DEPENDS |
X |
It only makes sense to get out of it, if you absolutely cannot afford the monthly payments. Many variable rates allow you to fix your rate for free as long as you extend your term, however, clients have already weathered the worst of the storm, it would be a shame to have them fix it right near the end of the higher rate environment, if they can, I would wait.
Question #4: Should I opt for a longer amortization period?
YES | NO | IT DEPENDS |
X |
I almost always recommend the 30-year amortization vs the 25-year, even though the rate is usually slightly higher, it gives you more cashflow. Although I am not a financial advisor, I personally take the difference in cashflow, and invest that. At the end of my term, I take the growth and make a principal investment against my mortgage, therefore bringing down my principal and interest paid over time. This strategy goes require discipline on the client's part.
Question #5: Can I trust a bank for mortgage renewal advice?
YES | NO | IT DEPENDS |
X |
I would always recommend all clients contact a broker for all options. Banks will only tell you their rates not others. Furthermore sometimes there are things behind the scenes that clients have no control over. Also, many clients coming out of a variable term might need to refinance, they might not be approved at today's rates, its best to discuss with a broker to strategize the best renewal options. Worst case scenario, the client renews at their current lender with the peace of mind they got the best deal.
Question #6: What piece of advice would you pass on to anyone looking to renew their mortgage?
Speak with a broker, someone who knows what they are doing. There are many moving parts in the mortgage that the client might not be aware of. Make sure you choose a broker with good organic reviews, and not someone who is more of a content creator and less of a broker. Also, brokerages have access to different types of rates that the branch might not have access to, also there are lenders that only work with brokers that the client might not know of.
CTVNews.ca Top Stories
Trump making 'joke' about Canada becoming 51st state is 'reassuring': Ambassador Hillman
Canada’s ambassador to the U.S. insists it’s a good sign U.S. president-elect Donald Trump feels 'comfortable' joking with Canadian officials, including Prime Minister Justin Trudeau.
Mexico president says Canada has a 'very serious' fentanyl problem
Foreign Affairs Minister Mélanie Joly is not escalating a war of words with Mexico, after the Mexican president criticized Canada's culture and its framing of border issues.
Quebec doctors who refuse to stay in public system for 5 years face $200K fine per day
Quebec's health minister has tabled a bill that would force new doctors trained in the province to spend the first five years of their careers working in Quebec's public health network.
Freeland says it was 'right choice' for her not to attend Mar-a-Lago dinner with Trump
Deputy Prime Minister and Finance Minister Chrystia Freeland says it was 'the right choice' for her not to attend the surprise dinner with Prime Minister Justin Trudeau at Mar-a-Lago with U.S. president-elect Donald Trump on Friday night.
'Sleeping with the enemy': Mistrial in B.C. sex assault case over Crown dating paralegal
The B.C. Supreme Court has ordered a new trial for a man convicted of sexual assault after he learned his defence lawyer's paralegal was dating the Crown prosecutor during his trial.
Bad blood? Taylor Swift ticket dispute settled by B.C. tribunal
A B.C. woman and her daughter will be attending one of Taylor Swift's Eras Tour shows in Vancouver – but only after a tribunal intervened and settled a dispute among friends over tickets.
Eminem's mother Debbie Nelson, whose rocky relationship fuelled the rapper's lyrics, dies at age 69
Debbie Nelson, the mother of rapper Eminem whose rocky relationship with her son was known widely through his hit song lyrics, has died. She was 69.
NDP won't support Conservative non-confidence motion that quotes Singh
NDP Leader Jagmeet Singh says he won't play Conservative Leader Pierre Poilievre's games by voting to bring down the government on an upcoming non-confidence motion.
Canadians warned to use caution in South Korea after martial law declared then lifted
Global Affairs Canada is warning Canadians in South Korea to avoid demonstrations and exercise caution after the country's president imposed an hours-long period of martial law.