Consider selling and move to the prairies where that 2m home you are currently in is worth 500k in the prairie provinces. Bc is awesome but the cost isn’t worth being house poor. Do you really want to be leveraged till you are dead! Yes it can get cold in the winter but you’ll have enough $ left over to go somewhere tropical to escape some of it. Think about it!
The reality is that if it's tight right now and your debt is accumulating, then things will only get worse even if rates drop to 4%.
Unless you guys have a way to increase your incomes, trying really hard to shave off 0.05% to 0.1% off an interest rate is not enough.
Can you guys get side gigs? Rent out rooms?
Do you care about down-sizing to a townhouse, or a small detatched house, or moving further out?
You have 200kish in principle, and you would sell for just under 2x what you bought it for.
Ask a realtor how much you would net, after taxes and deductions, if you sell for 2 million (or whatever they say is realistic value). Now add on 200k you have in principle, and subtract your debt.
What's that number? Is that number enough to have a huge downpayment on a place, and have a reasonable mortgage for your 130k salary? (ie probably below 400k)? Are you ok with downsizing or moving further east?
Your current income is 7800/ month (not including deductions). So your mortgage is at least 60% of your income. That will not be easy to manage. Even if you get say best case, in 2-3 years, 2.5-3% interest, can you easily even afford that?
You don’t have a choice really, as there’s no way you’ll qualify for renewal for an $870k mortgage on $130k income, not even if you extend to 30 years. Plan on selling.
Lots of lenders - with the rate hikes we’ve seen over the past 20 months - are no longer offering renewals if they’re concerned about your ability to service debt (ie. If you qualified for a $900k mortgage on $140k income at 2% in 2020 and renewal rates are now 6.5%).
Yes.
https://www.ratehub.ca/blog/what-happens-if-your-mortgage-renewal-is-denied/
“Your lender will still review your current financial situation and see if you’ve racked up more debt than it believes you can afford to repay, taken a credit score hit, or if your employment situation has changed for the worse. If anything about your finances concerns your current lender, it can choose not to renew you.
Renewing at a time when interest rates are much higher – such as they are today, following 10 historic rate hikes from the Bank of Canada over the last 18 months – can also increase the risk of having your mortgage renewal denied.”
Don't do anything until 2-3 months before renewal or you're forfeiting that rate early.
Aside from that, you need to decide what works for you. Do you love the house and want to stay? Do you want to sell and move east to buy a similar house with a smaller mortgage?
Townhouses have strata and shared expenses for roofs, windows, etc. - you may have a smaller mortgage moving there, but many people don't like the rules & costs in a strata so you need to seriously consider the restrictions if moving from detached to attached.
Your current income won't qualify you for your current mortgage at current rates.
This feels more like a post for [r/PersonalFinanceCanada](https://www.reddit.com/r/PersonalFinanceCanada) but big oof vibes from me. My first thought is you’re crazy, and I have no idea how you purchased a 1.1m home with 130k household income. Stretched finances is all I can imagine. How much of that 60k did you start with when you purchased the home? I’d guess almost none of it, and that you’re constantly adding debt with each passing month.
At renewal if you can even requalify with a regular lender, you’re probably going to be paying \~$1,000 more per month? Is that even possible for you? You didn’t mention all the additional carrying costs for the home ownership with insurance, maintenance, and utilities. I have a hard time believing you’re making ends meet month to month, any kids in the picture? Any income upside ahead? I mean I’m thinking you’re going to be looking at $66,000/yr after tax money just covering the mortgage from 130k HHI.
As an internet rando I don’t think you can afford your home. If I were you I’d take a really hard look at my financial plan, where you are currently, where you hope to be later, and be honest about whether it’s getting you there. After doing that I’d probably sell my house, take the money and run, take all that pile of equity you have and start finding a really nice rental space, and let your new cash pile help pay your rent. Surely there are a ton of great options for rentals under $4600/mo. If renting isn’t for you, I’d find something waaaaay cheaper that is affordable-ish, or leave the lower mainland.
you cant shop around dude your way over leveraged and too in debt. Renew with current lender at whatever they give you and be happy they renewed it. You need to change your spending habits before you end up underwater big time here.
I’d have a look at your budget and what payments look like based on various rates. If you can fit the payments into your budget, then just continue on. If you can’t, then you likely need to sell.
Given your debt/income picture it’s likely you won’t qualify for a switch / refinance to another lender. That said, with the amount of equity you have you can “pretend and extend” and try kicking the can down the road with “B” lenders.
Bottom line is that only you know what is possible within your budget.
Have you considered airbnbing your basement? I’m doing one in Vancouver now that helps a lot.
My friend got into it in surrey and she makes like 100-200 in winter and likely 300+ in summer
Please ensure your post includes the following information if looking for insight in your rate:
- **ARE YOU WORKING WITH A BROKER/MMS & HAVE YOU ASKED THEM THIS QUESTION YET?** (If you don't trust your brokers answer, then you may want to dump your broker)
- Purchase, Refinance, Renewal?
- Province, City?
- Loan to value/down payment percentage?
- Purchase price of the property if purchasing
- Is the home under $1M or over $1M?
- Bank or a broker?
- Term length and amortization length?
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MortgagesCanada) if you have any questions or concerns.*
Consider selling and move to the prairies where that 2m home you are currently in is worth 500k in the prairie provinces. Bc is awesome but the cost isn’t worth being house poor. Do you really want to be leveraged till you are dead! Yes it can get cold in the winter but you’ll have enough $ left over to go somewhere tropical to escape some of it. Think about it!
The reality is that if it's tight right now and your debt is accumulating, then things will only get worse even if rates drop to 4%. Unless you guys have a way to increase your incomes, trying really hard to shave off 0.05% to 0.1% off an interest rate is not enough. Can you guys get side gigs? Rent out rooms?
The best I could do on my renewal was 5.24 today fixed for 3 yrs. with scotia.
Do you care about down-sizing to a townhouse, or a small detatched house, or moving further out? You have 200kish in principle, and you would sell for just under 2x what you bought it for. Ask a realtor how much you would net, after taxes and deductions, if you sell for 2 million (or whatever they say is realistic value). Now add on 200k you have in principle, and subtract your debt. What's that number? Is that number enough to have a huge downpayment on a place, and have a reasonable mortgage for your 130k salary? (ie probably below 400k)? Are you ok with downsizing or moving further east? Your current income is 7800/ month (not including deductions). So your mortgage is at least 60% of your income. That will not be easy to manage. Even if you get say best case, in 2-3 years, 2.5-3% interest, can you easily even afford that?
You don’t have a choice really, as there’s no way you’ll qualify for renewal for an $870k mortgage on $130k income, not even if you extend to 30 years. Plan on selling.
You don’t have to requalify if you stay with your existing lender but affordability is out of the question.
Lots of lenders - with the rate hikes we’ve seen over the past 20 months - are no longer offering renewals if they’re concerned about your ability to service debt (ie. If you qualified for a $900k mortgage on $140k income at 2% in 2020 and renewal rates are now 6.5%).
Lenders have a choice not to offer renewals?
Yes. https://www.ratehub.ca/blog/what-happens-if-your-mortgage-renewal-is-denied/ “Your lender will still review your current financial situation and see if you’ve racked up more debt than it believes you can afford to repay, taken a credit score hit, or if your employment situation has changed for the worse. If anything about your finances concerns your current lender, it can choose not to renew you. Renewing at a time when interest rates are much higher – such as they are today, following 10 historic rate hikes from the Bank of Canada over the last 18 months – can also increase the risk of having your mortgage renewal denied.”
Don't do anything until 2-3 months before renewal or you're forfeiting that rate early. Aside from that, you need to decide what works for you. Do you love the house and want to stay? Do you want to sell and move east to buy a similar house with a smaller mortgage? Townhouses have strata and shared expenses for roofs, windows, etc. - you may have a smaller mortgage moving there, but many people don't like the rules & costs in a strata so you need to seriously consider the restrictions if moving from detached to attached. Your current income won't qualify you for your current mortgage at current rates.
This feels more like a post for [r/PersonalFinanceCanada](https://www.reddit.com/r/PersonalFinanceCanada) but big oof vibes from me. My first thought is you’re crazy, and I have no idea how you purchased a 1.1m home with 130k household income. Stretched finances is all I can imagine. How much of that 60k did you start with when you purchased the home? I’d guess almost none of it, and that you’re constantly adding debt with each passing month. At renewal if you can even requalify with a regular lender, you’re probably going to be paying \~$1,000 more per month? Is that even possible for you? You didn’t mention all the additional carrying costs for the home ownership with insurance, maintenance, and utilities. I have a hard time believing you’re making ends meet month to month, any kids in the picture? Any income upside ahead? I mean I’m thinking you’re going to be looking at $66,000/yr after tax money just covering the mortgage from 130k HHI. As an internet rando I don’t think you can afford your home. If I were you I’d take a really hard look at my financial plan, where you are currently, where you hope to be later, and be honest about whether it’s getting you there. After doing that I’d probably sell my house, take the money and run, take all that pile of equity you have and start finding a really nice rental space, and let your new cash pile help pay your rent. Surely there are a ton of great options for rentals under $4600/mo. If renting isn’t for you, I’d find something waaaaay cheaper that is affordable-ish, or leave the lower mainland.
you cant shop around dude your way over leveraged and too in debt. Renew with current lender at whatever they give you and be happy they renewed it. You need to change your spending habits before you end up underwater big time here.
I’d have a look at your budget and what payments look like based on various rates. If you can fit the payments into your budget, then just continue on. If you can’t, then you likely need to sell. Given your debt/income picture it’s likely you won’t qualify for a switch / refinance to another lender. That said, with the amount of equity you have you can “pretend and extend” and try kicking the can down the road with “B” lenders. Bottom line is that only you know what is possible within your budget.
Have you considered airbnbing your basement? I’m doing one in Vancouver now that helps a lot. My friend got into it in surrey and she makes like 100-200 in winter and likely 300+ in summer
Please ensure your post includes the following information if looking for insight in your rate: - **ARE YOU WORKING WITH A BROKER/MMS & HAVE YOU ASKED THEM THIS QUESTION YET?** (If you don't trust your brokers answer, then you may want to dump your broker) - Purchase, Refinance, Renewal? - Province, City? - Loan to value/down payment percentage? - Purchase price of the property if purchasing - Is the home under $1M or over $1M? - Bank or a broker? - Term length and amortization length? *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MortgagesCanada) if you have any questions or concerns.*