For most of us who own a home, mortgage payments are are greatest monthly expense and of us who live in the Lower Mainland, mortgage payments can eat up a disproportionate amount of our income compared to other expenses.  

The first thing to do is gather some information:

• What is your current mortgage rate and term (for how long will you have this rate)?
• Using a Mortgage Calculator – What would you payments be if the rate increased by 2%? 4%?
• What will your lender confirm for you in terms of a longer term and rate?
• Is there penalty (and any other cost) associated with making the change? If so, what is the total cost?
• Based on the change, what will your new payments be?

Having this information will help you to understand the impact on your current expenses and future expenses.This is key as typically income doesn’t rise at the same rate as rates and mortgage payments are made with after tax dollars!

Next post will note some ideas you can discuss with your lender to ensure you’re informed of any options available to you.