Sharon Davis of DLC BlueTree Mortgages WEST anticipates relief with potential rate cuts, fostering a traditional spring market.
— Canadian Mortgage Professional Magazine (@CMPmagazine) January 15, 2024
“But there’s a high likelihood that their mortgage payment is going to go up, even though the balance is lower. So many Canadians are going to experience payment shock – that’s discouraging. It’s going to take a lot of diligence and patience for mortgage professionals including nesto to make sure that we understand why and how it works.”
Lower savings, higher credit balances set to impact renewals in 2024
Another factor for the industry to keep in mind this year, he said, is the reality that many Canadians have depleted their savings accounts and utilized credit much more over the past two years amid affordability challenges and squeezed budgets.
That’s a further trend that’s likely to bring the importance of agents and brokers into sharp focus in 2024, he said, with some borrowers likely to face a difficult decision on renewal in light of their changed financial picture – and possibly having little option other than to renew with their existing lender.
“As great as it is to talk about the opportunity to help people renew mortgages at more favourable rates, I think we’re going to experience a little bit more of 2023’s phone calls and conversations where there are just so many people who want help, want advice, want to change mortgage companies – but they’re going to be unable to from a qualification perspective because of the depleted savings and the higher credit [balances],” Belair said.
“So it’s going to be a difficult year. There are tons of opportunities to renew mortgages, but it’s not going to be as simple as it was in 2019 and 2020. A lot of Canadians are in a much different financial position than they were previously, before the pandemic.”