How does the borrowing landscape look for Canadians in 2023?

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“We’re not seeing many of our clients from 2020 struggle because the vast majority of those who opted for variable at the time have exercised their convertibility feature early into the rate hikes, in Q2 of 2022,” he said.

“Those of our clients who took out a fixed rate mortgage opted for a five-year term in the 1-3% range and will benefit from payment stability until 2025. We send out automated reminders about their prepayment and repayment privileges, encouraging folks to include accelerated paydown of their loan principal in their financial plans for the next two to three years.”

The latter strategy, he said, will mean clients pay off their mortgage slightly faster – and help them absorb possible payment shock when the mortgage comes up for maturity at a higher interest rate.

How will the alternative lending space be impacted by higher interest rates?

A product of the high-rate environment is that many borrowers are no longer able to qualify on the conventional or A side, meaning that they move to an alternative or private lender to meet their financing needs.

That will be a big storyline in the mortgage industry for 2023, according to Sadiq Boodoo (pictured below), principal broker at Approved Financial. Speaking as part of a panel discussion at a recent Financial Services Regulatory Authority of Ontario (FSRA) event in Toronto, he said mortgage professionals would play a central role in helping borrowers meet their financing needs.

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