Dealing With High Interest Rates And Monthly Payments

With interest rates going higher and the real estate market being the most chaotic ever, it might be hard to deal with high interest rates, bigger monthly mortgage amounts, and the inability to downsize because of the home prices.

Very rarely will we hear about the struggles homeowners and mortgage holders go through, the narrative usually leans toward first home buyers and how it’s almost impossible to find a decent home for a fair price.

But, what about you? You worked hard and bought your house. Now, with interest rates being higher and inflation on the rise, it’s hard to keep up. And you’re not alone.

According to the MNP Consumer Debt Index created by Ipsos, 42% of people surveyed said that the rising rates could drive them closer to bankruptcy.

After the Bank of Canada doubled its rate in March, all the big banks and main mortgage lenders have moved their prime rate to 2.70%. This only made things harder for both mortgage holders and home buyers.

The good news is that most homeowners qualified at the stress test rate of 5.25% and many have had their property values increase by a min of 25% so now may be a great time to tap into that equity that can easily be available. It is still cash and it’s your cash.

So, how to deal with that and make your wallet smile for a bit? Take a look at these tips:

Extend Your Amortization

And save up more than 30% on monthly payments. Sure, you might have to pay a higher mortgage rate than what you have now, but extending your mortgage period from 15 to 30 years can be of great benefit for you. By lowering your monthly payments, you will have more money to spend on other important things, like bills or insurance.

Rent A Part Of Your Home

If you can, consider renting a part of your home. That way you can generate more cash flow and lower your debt. Check if your municipal rules allow doing that, and of course, do some background checks on the renter.


Currently, secured credit lines are available at prime plus .50%  percent and it is interest-only to borrow – but you’ll need excellent credit, proof of income and enough equity to qualify, while the minimum equity is 20%.

Read More About HELOC Here

You can also refinance to pay out debt and create a large cash account. In many cases your cash flow increases and payments lower. This also puts the money sitting around in your home doing nothing to work instead of creating more debt.