June 23, 2024

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Refinance or renew? How to choose when mortgage renewal creates sticker shock

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MONTREAL — Many Canadian homeowners are facing sticker shock with their monthly payments as their mortgage comes up for renewal, leaving them with a crucial choice: whether to renew or refinance their home loan.

“They’re used to paying $2,000 every single month for the last five years and all of a sudden, now their payments are going to go up to $4,000,” said Leah Zlatkin, a mortgage expert at LowestRates.ca.

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When a homeowner renews an existing mortgage at the end of its term, traditionally five years, the lender updates the contract with a new interest rate — and as Zlatkin says, most mortgage-holders will see higher monthly payments after a swiftstring of increases to the Bank of Canada’s key rate.

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The Canadian Press

2023-10-23 04:00:38

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