Interest rate increases – Are we done yet?

Tracy Head • November 7, 2022

While many in the mortgage world anticipated rates to increase this year, I don’t think anyone expected them to increase so much and so quickly.


What we’ve seen is unprecedented. If you are in a fixed rate mortgage these rate increases won’t affect you until you reach the end of your current term. At that point you will need to carefully consider where rates are at the time and decide whether you are going to opt for a fixed rate again, and if so for how long.


If you are currently in a variable mortgage there are a couple of things that may be happening for you right now. If you are in an adjustable rate mortgage (ARM), your mortgage payment will have increased as prime has increased. That means that your remaining amortization is still on track.


It likely also means, however, you are starting to feel a pinch when making your mortgage payment. I know, I’m in an ARM and my payment has increased by more than $500 per month since March.


If you are in a variable rate mortgage (VRM), your mortgage payment will have stayed the same despite the rate increases but you are now at a tipping point, where the payment you are making may not even be covering the interest due on your mortgage. That can potentially mean either you are no longer paying down any of the principal balance or the principal balance is increasing.

That means the remaining amortization (length of time to pay off your mortgage) will be increasing as well.


For clients who are in VRMs, they are reaching what is known as the “trigger” rate (the tipping point I mentioned above). Financial institutions are starting to reach out to those clients to make alternate arrangements to make their mortgage payments.


Some of the options presented will likely include:


• Increasing your payment based on the current variable rate to bring the payment back to the point that it is paying down principal again.

• Make a lump sum payment and keep your payment the same.

• Convert to a fixed rate which will be increased to keep your amortization on track.


Whether you are in a VRM or an ARM, the increases to your mortgage payments smart.


Before you consider a knee-jerk reaction of locking into a five-year, fixed term, it is important to ask yourself why you are in a variable mortgage in the first place.


It is also important to do some serious thinking about your plans for the next few years.


While locking in for a longer term may feel attractive after how unsettling this year has been, if you are anticipating any kind of a major change to your life or your financial situation it may be a wise choice to stick with your original plan of the variable mortgage.

I am seeing a fair number of people choosing shorter, fixed terms in anticipation of rates softening again.


As a positive sign, I am starting to see rate specials posted by multiple lenders. This week, my favourite lender dropped its five-year fixed rate (for insured mortgages) from 5.84% to 5.44% and then again to 5.29%.


I think we will see rates drop a bit more before the next rate announcement on Dec. 7.


If you are struggling with the increased payments on your mortgage, I urge you to reach out to your mortgage person as soon as possible.


Lenders do not want to be in the foreclosure business, so most are open to working with their clients to find a solution that provides some relief and stability

Tracy Head

Mortgage Broker

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Mortgage Options

By Tracy Head • November 1, 2025
In past columns I’ve covered when no means no and when no means maybe there’s another option. There are many aspects of my work that I love. One is that I learn something new each and every day. No two clients are the same and no two applications are the same. Some are easier than others to put together. Another thing I love is that we have so many options to consider when working on our files. I do find immense satisfaction when I tackle a complicated file and find a great solution for my clients. I am working with an amazing young couple as they build their portfolio of rental properties. They are relatively young but both work incredibly hard and really have their ducks in a row. The plot twist they have is that they both transitioned from salaried positions to being self-employed over the last year. Their credit scores are both in the high 800s (900 is a perfect score), they are both making substantial income, and they have saved over $100,000 for their down payment.  Seems like a slam dunk right? Because they don’t have two years of filed tax returns as self-employed business people our options are a bit limited. There is a program we use in this situation but their scenario does not fit within the guidelines. Their dream home just came on the market so they are wanting to buy and convert their current home to a rental property. This particular home came up in the neighborhood they really want to be in, and homes don’t come up very often. It is immaculate and has a legal suite. They had originally approached their bank and been told it was a hard no. I work with their realtor fairly often and she suggested they give me a call. Within 24 hours we had the approval in place for them. We ended up taking the application to an alternative lender for a two-year term. The interest rate is about .5 per cent higher than a chartered back and there is a 1 per cent fee charged. We weighed out the pros and cons of going this route versus holding off until their next tax returns are filed before purchasing another property. After chatting with their financial advisor and accountant they felt it was worth the slightly higher interest rate to be able to buy the home now. I will say I love straightforward simple applications but in reality those are few and far between. Most of the applications I work on these days seem to have some sort of plot twist like this one so I am very grateful there are so many options available to help clients who may fall a little outside of the standard lending guidelines.

Marital Breakdown

By Tracy Head • October 18, 2025
One topic I haven’t tackled for a long time is marital breakdowns. When you are working your way through what is arguably one of the most difficult times of your adult life it’s important to know that you have options. There is a program available for refinancing your home specifically for spousal buyouts. Under this program we can refinance your home back up to 95 per cent of the value of the home and use the new funds to pay out your ex-partner and pay out marital debts (provided this is written into your separation agreement). Qualifying this to say that we can refinance to 95 per cent if the value of your home is under $500,000. If the value of your home is over $500,000 we need to ensure you have 5 per cent of the first $500,000 and 10 per cent of any value over the $500,000 left as equity in your home. It’s a small distinction but in the Okanagan the second calculation is the one I see the most. With recent changes to the First Time Home Buyer’s program we can now extend the amortization out as far as 30 years if needed to make the numbers work. It is important to note that this program is an insured program meaning that a premium is added to your mortgage so its important that you work with someone who is familiar with this program. You will require a finalized separation agreement to refinance to pay out the other party.  If you have significant equity in your home and we can make the numbers work a traditional refinance is also an option. In this case we can only increase your mortgage to 80 per cent of the value of your home but there is no default insurance premium required so this is usually the preferable option. A question to ask yourself is whether it makes sense to refinance your current home or to sell and buy a new home. The list of pros and cons will be different for each person, but one of the most important things to consider is whether or not you can afford the higher mortgage payment on your own to stay put. Also key to consider is whether or not you need the same space or whether downsizing might be another option. Do you have children that you want to keep in the same area and same school? Is your current home in a convenient location for work, school, and social activities? Or are you needing a fresh start somewhere new? If you find yourself in this situation and are considering your options with respect to refinancing your home I encourage you to reach out to a professional that can help you take a good hard look at your situation. Doing a bit of legwork upfront may help relieve at least one part of the mental load as you work your way through a separation or divorce.