Feeling the Financial Squeeze? How Refinancing Could Help You Breathe Easier

If you're like many Canadians, you might be feeling the pinch of rising costs and mounting debts. From grocery bills to mortgage payments, it's no secret that managing finances has become more challenging. At Swivel Mortgage Group, we're here to shed light on how refinancing your mortgage could offer some much-needed relief.

The Current Financial Landscape in Canada

Recent data highlights the financial strain many Canadians are experiencing:

• Record-High Consumer Debt: As of late 2024, Canadian consumer debt reached a staggering $2.56 trillion, with mortgage debt comprising a significant portion of this total. 

• Rising Credit Card Balances: The average credit card balance for Canadians stood at $4,681 in Q4 2024, marking a 6.0% increase from the previous year. GlobeNewswire

• Increased Mortgage Delinquencies: Ontario witnessed a 90.2% surge in mortgage delinquency rates in the final months of 2024 compared to the same period in 2023. 

These statistics underscore the financial challenges many are facing, emphasizing the need for effective solutions.

Refinancing: A Potential Solution

Refinancing your mortgage involves replacing your current mortgage with a new one, potentially with better terms. Here's how it can help:

1. Consolidate High-Interest Debt

By refinancing, you can consolidate high-interest debts, such as credit card balances, into your mortgage. This strategy can lower your overall interest rate and simplify your monthly payments.

2. Lower Monthly Payments

Refinancing to a mortgage with a lower interest rate or extending your amortization period can reduce your monthly payments, providing immediate financial relief.

3. Access Home Equity

If your home's value has increased, refinancing allows you to tap into your home equity. This cash can be used for various purposes, including home renovations, education, or emergency expenses.

4. Switch Mortgage Types

Changing from a variable-rate to a fixed-rate mortgage (or vice versa) through refinancing can align your mortgage with your financial goals and risk tolerance.

Considerations Before Refinancing

While refinancing offers numerous benefits, it's essential to consider:

• Prepayment Penalties: Breaking your current mortgage term early may incur penalties. It's crucial to calculate whether the long-term savings outweigh these costs.

• Qualification Criteria: Lenders will assess your credit score, income, and debt levels. Ensuring your financial health is in order will facilitate the refinancing process.

Take the Next Step with Swivel Mortgage Group

Navigating the complexities of refinancing can be daunting, but you don't have to do it alone. At Swivel Mortgage Group, we're committed to helping Canadians find financial solutions tailored to their unique situations.

Ready to explore refinancing options? Contact us today for a personalized consultation and take the first step toward financial relief.

References:

1. Statistics Canada. "National balance sheet and financial flow accounts, fourth quarter 2024." Link

2. TransUnion Canada. "Q2 2024 Credit Industry Insights." Link

3. CP24. "Ontario's mortgage delinquency rate nearly doubled in the final months of 2024." Link