Surviving the Mortgage Renewal Wave: Lower Your Payments and Protect Your Portfolio

Welcome to the Wisdom Lifestyle Money Show. I'm your host, Dillingham. Today, I'm gonna be talking to you about this massive renewal wave that you're hearing all this stuff about, what it means, and what you can do about it if you have loans coming up for renewal, tricks of the trade, all that good stuff. So first, let's start off with what it is. So most clients and mortgage holders are renewing their loans this year and next year.

Now this sort of happened because people you know, there was there was COVID and rates got really good, and all these people took different terms and lenders were offering shorter terms and all these things. And and again, I'm not pointing fingers at them or whatever. It's just that they were having all these different promotions and whatever. And so people got all these loans. And just with the timing of everything, right, nobody predicted tariffs and all this other good stuff.

So now we have all these renewals that are happening over the next two years. Now rates have come down a bit. Okay? So that's that's good. But we're starting to hear that, you know, rates might be going up.

Now when we're talking about rates going up here, I do wanna clarify that that is the fixed rates that would be going up. The reason is fixed rates are tied to the bond market. And anytime there's wars, turmoil, trouble, right, like, those bonds can go up. And that's what they did during COVID. Right?

They they went up. They made rates very expensive, and then it came down after. But we're entering, you know, unique territory, and these these things are happening. So the reason I bring this up is because you've got these renewals that are up now, but now the rates are starting to go up slightly. Right?

So if that continues, depending on your renewal is, it it could be bad. Right? And there are you'll hear horror stories in the news saying, you know, foreclosures are up four times in this area. You know, that might be true, but when you look at the numbers, right, it was point zero two five of homeowners in this area. Now it's at 1%.

So it's it's still very, very low numbers, but the news projects it to be this terrible, terrible thing. But I don't want you to worry listening to this because we have solutions to make this not so troublesome for you. But so long story short, all these loans are coming up for renewal. And if you have rates that are two, some are even less than two, some are around three. Right?

Like, this is what we're seeing. And then you renew and you're at four, let's say, four to five depending on the term you pick and your amortization, that type of stuff. But when you renew into these higher loans, right, your payment is going to go up. So that makes it more unaffordable for people, for everything. Right?

So that's what this problem is is is that, you know, everything's more money anyways. Right? Groceries are more money than they were a few years ago. Like, everything's more money. So then to to have your home be more costly, it's troublesome for clients.

So there's there's a few there's a few things that we can do and what I advise all of my clients. So I hope this helps you, and please share it with a friend, anybody. Like, everybody needs to know about these options. So one, do not even if it's getting you the best rate, you need to think of the future and what's going on. Right?

And, again, with with wars and tariffs and everything, like, if inflation is going to go up, that means all your payments are gonna go up. So even if the bank is giving you a fantastic rate to try to keep you because I have seen some lenders offer fantastic rates that you couldn't get elsewhere to stay. Okay? But that's a problem because the rate is only one cost of your mortgage. If you're getting the best rate, but you're getting a fifteen year amortization because you have to lock into the same amortization that you have now.

So if you do that, your payments are gonna be high. Where what we can do is when you're up for renewal, we just transfer your balance from the one lender to another lender, and now we can but it's it's not called a transfer. Actually, it's technically a refinance. It's how we put it into the system. But we're not adding money for debts unless you have other debts that you wanna group in at this time.

But what we're doing is we're extending your amortization. We can go up to 30 with prime a lenders. Whether or not you wanna go up to 30, that's up to you. But by extending it, now I don't want you to think, oh, you know, I had fifteen years, and now I'm going to thirty. I'm gonna be paying this loan for thirty years.

That's not what this means, and I'll touch on that in a second too. But by having that lower payment, what will happen is if everything else around you is getting more expensive, you have this lower payment, which is protecting you. So you're not going to potentially lose the home or struggle, you know, nearly, you know, financially because you've altered your mortgage payment. Now think of this like a season because that's how our markets are. There's always a high, and there's always a low, and it always cycles up, down, up, down, up, down.

That's what it does. You look at the index chart. Look at that. I talked about this in a previous episode. The index chart is if you had invested, you know, a thousand dollars.

Well, some of them are different. Some are, like, 10,000. Are 5 and whatever. But if you invested x amount of money into whatever asset at nineteen hun you know, the year 1900, some go to 1920, but what it would do and what it looks like today. And you could see everything on there is going up, down, up, down, up, down, up, down.

But over the long period of time, it's going up, which is important. So I'm talking about this because you have to know that there's cycles. So we want to get you the lowest payment during the cycle where the payments are the highest. It doesn't mean that you have to stick with a thirty year. You can slightly increase your payment even if it's a 5% increase, a 10% payment increase.

That little bit and that's not a lot. Right? So if you're paying a thousand biweekly, let's just say. I'm just making this up. Some people are gonna be like, that's high.

I know a lot of our listeners are gonna listen and be like, oh, that's really low. Right? So, obviously, it depends where you live. But let's say you're paying a thousand biweekly, adding that 10% is only a $100, but that can take years off of your loan. So think of the thirty years as a minimum payment attached to your credit card.

Right? If you have a tight month and you have a balance on there, you just pay the minimum. If fantastic month, right, you pay it off in full. So it all it all depends on your finances. But if you look at it like that, that the thirty year is your minimum payment, it doesn't mean you're forced to pay the the minimum payment.

You can pay extra whenever you want, but that gets you out of this this season of of items being expensive. Right? Because right now, the incomes are not increasing, not even at a close rate to what inflation is. So so okay. So we went over the problem of of the renewals and what's happening and how they're all coming due, and everyone's payments are gonna go high.

It's gonna increase foreclosures and stuff like that. Side note, that also means it's a great time to buy for investors. Right? That's when you can get good deals. We went over extending your amortization by changing lenders.

Now I'm gonna just put it out there. Do not expect the same rate. Like, the banks and certain lenders, if they're giving you a fantastic rate, it's because they're concerned that they're gonna lose the business. So they're giving you this really good rate that you can't get anywhere else. But that lower rate with a shorter amortization is gonna mean a lot more money is coming out of your pocket than if you get a slightly higher rate, and it's not a lot, like 25 basis points, maybe half a percent higher more, but then you can have a much longer amortization, and your monthly payments overall are gonna drop drastically.

So from a budgeting standpoint, it is so much better, and it's hard to wrap your mind around that because we're all, like, taught. Even me. Right? Like, when I speak to lenders and everything, it's all, oh, lowest rate, lowest rate, but it's so much deeper than that. So I just wanna call that out.

Now there's a few other things that are available to you. Okay? So, obviously, this show is geared more towards investors, but still, we're seeing investors have vacant properties. Right? So it's putting a strain on their monthly cash flow.

So all of these things correlate to making a stronger overall family financial budget. So another thing that's possible, and and I actually did a whole episode on it in the past, but adding a secondary suite to your home. There's financing options for it. We actually have some that are insured through Sageen currently. CMHC, they canceled the program.

There was not enough demand, so they canceled it. But I think it's a fantastic program where you can finance up to 90% of your home's future value by adding rental units to it. Now, again, with Sage and how they wanna see this is they do want you to supply all the quotes and everything, and then they'll review it and approve it, and then we're good to go. They don't let you refinance money for debts or none of that stuff. So if you're hearing this, like, don't, you know, don't call in asking for that because it's not it's not gonna work.

It's only they only give you the money for the renovation costs. But we can tap into these programs, and you can add these additional dwelling units to your home as well. So if you do that and combined with your renewal, it is going to sharpen your financial situation. Imagine that. Right?

Imagine we can save you a thousand dollars a month on your renewal payment because you went from a fifteen year to a thirty year amortization. Right? Imagine that. And then you're adding a second unit, and it could be an ADU in the backyard. It doesn't necessarily have to be attached to the home.

But if you have a basement you're not using, I'm seeing some people build up. I'm even considering it on on my home just for extra. I mean, our in laws, currently live with us. Right? And I'm thinking, like, I can put a suite up above the garage.

Like, I could build that, and and they can live there. They're mobile, so it's it would the stairs would be no problem. But, like, that is absolutely an option for every every single person. Right? So that extra income in combined with the monthly savings from your renewal optimization, it's a big, big difference to your finances.

Right? So these are things that I encourage you to look at and to do. You always want to, and I know in the last episode, I talked about optimizing your portfolio because you just never know what's going on. But it's true. There's so many market fundamentals that are going on.

Right? We're hearing AIs taking over people's jobs and all this stuff everywhere. Right? Tariffs war. Like, do you know what I mean?

So you just don't know what's gonna happen tomorrow. Optimize everything today. Why wait? Why just go about life living and then it's stuck? Right?

Like, if you can optimize and and make your portfolio more profitable, lower your your monthly expenses, that's only gonna be better for you. So if, you know, you were subject to a layoff due to AI or whatever, the economy, you know, you could accept if you had to, you could accept something that didn't pay the same because you've optimized everything and made it better. So, anyways, it's it's up to you. I mean, we we have so many clients that are ultra, ultra wealthy, and, you know, I realize a lot of this doesn't impact them, but then we also have clients that are just getting started. Right?

They're just getting started on their investor journey. So, you know, we see the whole spectrum of clients, and this episode may or may not apply to everybody. But I I just think it's smart, you know, financial planning, and I encourage everybody to take advantage of it. So we've went over two major items here. Right?

We've went over how to optimize your renewal, how to add additional income to your property, and that is mainly it. You know, there's there's other things, but I'm not one for, you know, if you've built up a lifestyle to get rid of it. Right? But, you know, we are seeing people downsize and stuff like that. And, of course, that is an option too.

But I find before we get there, right, if we can optimize things and make it better, that might not be be the case. And I'm also seeing the the flip side where this is a huge opportunity for investors, and it's like, go. Go. Go. Go.

Go. Like, now is the time to invest. Yeah. There's a little bit of a storm going on right now, but they're seeing, you know, clear winds up ahead, and they wanna move forward. So it just depends where your mindset is at.

But I think, again and I'm repeating myself, so I'm not gonna say it again, but I think the most important thing is to optimize everything you got. Doesn't matter if life is good. Doesn't matter if life is bad. If you optimize it, it's only gonna be better. Doesn't matter if it's your finances, if it's your your looks, doesn't matter if it's your, you know, your your workflow and, like, everything.

If you optimize whatever aspect of your life that needs improvement, it's gonna get better. So anyways, I hope this episode was useful. Please share it with your friends, neighbors, relatives, everybody. Like, follow, subscribe, all that stuff. It means a lot to me.

Thank you so much. Have a great day.