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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Challenges

By Tracy Head • November 29, 2025
The topics I’ve written about over the years are almost always a reflection of a common theme I’ve seen or challenge I’ve dealt with since the last column I wrote. This one is no different.  The last few months, and particularly the last few weeks, have been among the most challenging in my mortgage career. I say challenging but that might also mean stressful. When working with clients and finding the right fit for their mortgage I look at many different factors. Rate is obviously one of the most important considerations. I also try to get a solid understanding of my clients’ short and longer term goals. For instance if the clients are looking to upsize from a home in the city to a rural property with acreage I will look at chartered banks or credit unions instead of a monoline lender. If the clients are purchasing a lease-hold property there are only a few lenders that will provide financing so that narrows the field. If the clients want direct access to manage their mortgage themselves I will place them with one of my favorite lenders that has an amazing client portal. Sometimes despite the client and the broker doing everything possible to ensure a smooth mortgage process things go sideways. Due to incredibly high volumes over the last few months I’ve seen refinance at renewal mortgages delayed by days or weeks. The stress for everyone involved is overwhelming. The most valuable lesson I’ve learned as a mortgage broker came from a wise more-seasoned broker about ten years ago. She said to me “when things are going sideways on a file, don’t get caught up thinking about what’s going wrong – think about what you need to do to fix it.” I have been hearing these words on repeat the last two weeks, and I think this is helping to keep me (and my clients) on track. If things do appear to be going sideways for you, I encourage you to connect with your mortgage person for regular updates.

Changes Affecting Financing

By Tracy Head • November 14, 2025
I consider myself a lifelong learner, which is part of the reason I love my work. Every day there is something new and exciting to learn, or in some cases re-learn. When I first came back to the mortgage world a more seasoned broker gave me a copy of a handout she used with clients. It talked about the ten most important things NOT to do between removing your financing subject and finalizing the purchase of your home. At the time I remember thinking that the handout sounded patronizing and I assumed clients just understood they shouldn’t do any of the ten things. You know what they say about assuming things. Once or twice my clients have made decisions that have almost jeopardized their financing. The reason this came up for me right now is that I am working my way through a training course which is geared towards helping me re-design my team and my workflow, with the ultimate goal of providing even better support to my clients. One of the changes I am going to implement is adding a list very similar to the original ten things not to do list to my signing packages so that we are all on the same page and avoid any potential challenges down the road. What are the ten things? I won’t go over all of them, but here are a few of the things that have surfaced recently: If you change the closing date on your purchase or if you receive the Notice of Completion on a newly built home, advise your mortgage person right away. Never assume your realtor will do this for you. Do not go out and finance anything without checking with your mortgage person. If you are pushing the upper limit of your buying power even a small loan for furniture might put your financing at risk. Many lenders pull your credit again shortly before your mortgage finalizes. Along the same lines, make sure all of your payments are made on time. Do not co-sign a loan for anyone. Do not quit your job or change employers without talking to your mortgage person ahead of time. Do not spend any of the money you have tucked away for your down payment. If you have money sitting in higher-risk investment better to move them to something more stable in case of market fluctuations. Most people think that once they get the ok to remove their financing subject that their mortgage is a done deal. The small print on every mortgage commitment includes a clause that says something along the lines of “Your financing is based on your current situation. Material changes to your situation prior to the funding of your mortgage may affect your approval.” I’m currently working with a young lady that decided to purchase a boat between the time we had our pre-approval conversation and the day she wrote her offer to purchase. She had decided not to buy a home then found her dream property. We’ve had to look at a few options as the boat payment threw her ratios out of line. She is fortunate that her parents are very supportive and are going to gift her the money to pay off the boat loan, but if she didn’t have that back up plan the new loan would have reduced her borrowing power by over $100,000. The reason I added the comment “without checking with your mortgage person” in the bullets above is that every client’s situation is unique and some of those changes might be just fine. Some might not, and the last thing you want to do is find yourself scrambling to figure out a Plan B shortly before closing.  Best to have the conversation and be certain.