A Year-End Review: Tips, Tricks, and Best Practices for Homeowners in the New Year

The end of the year is always a good time to reflect—and when you’re a homeowner in Canada, it’s also the perfect time to get ahead of what’s coming. With interest rates fluctuating, inflation still lingering, and many mortgage renewals on the horizon, being proactive could save you thousands.

We caught up with one of Mortgage.Expert’s in-house advisors for their take on how Canadian homeowners can best prepare for the road ahead. Here’s a breakdown of their expert insights, including financial tips, mortgage renewal strategy, and what to expect from the Bank of Canada in 2023.

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Year-End Financial Tips: Don’t Let Holiday Spending Haunt You

The number one piece of advice for wrapping up the year strong? Stay on top of your spending.

With borrowing costs still high, every extra dollar of debt from credit cards, lines of credit, or HELOCs (Home Equity Lines of Credit) will feel heavier in the new year. That 20% credit card interest? It’s even more painful when you factor in inflation.

Take some time to:

• Review your budget: Track your income and spending, and trim non-essentials like unused subscriptions.
• Pay off high-interest debts first: Focus on credit cards before larger, lower-interest loans.
• Reassess your emergency fund: Rising costs mean your safety net might need a top-up.

And remember, even a small shift in habits can create room in your budget—especially important if you’re nearing a mortgage renewal.

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Mortgage Renewals in 2023: What to Know Before You Lock In

Thousands of Canadians will be renewing their mortgages in 2023, and many will be facing much higher interest rates than what they originally signed for.

So what’s the best move? According to our expert, it depends on your financial health:

• If your mortgage is under control and your income is stable, a variable rate might be worth considering—especially if you can make payments equivalent to a 5-year fixed rate. That way, if rates drop later in the year, you’ll be ahead of the curve.
• If your debt load is high or your credit is stretched, it’s wiser to go for a longer-term fixed rate. You’ll sacrifice some short-term flexibility but protect yourself from future volatility.

The bottom line: renewal time is decision time. Don’t just accept your lender’s offer—shop around or speak with a broker to find your best fit.

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Rate Hikes in 2023: What Can We Expect?

If 2022 taught us anything, it’s that economic predictions are often just educated guesses. That said, here’s what we do know:

• The Bank of Canada raised rates aggressively in 2022 to combat inflation. While it’s eased a bit, inflation remains above target.
• The BoC’s path forward will likely depend on job data, inflation numbers, and global economic pressures.

Our advisor’s advice? Don’t try to time the market. Instead, prepare for a few possibilities:

• Rates could stay higher for longer if inflation proves sticky.
• If recession fears deepen, rate cuts could come faster than expected.

Either way, being ready with a flexible mortgage plan—whether it’s through a shorter term, an adjustable rate, or even refinancing your debt—is key.

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Final Thoughts: Prepare Now, Thrive Later

No one has a crystal ball, but you don’t need one to take control of your financial future.

The best practices for homeowners heading into 2023 are simple:

• Spend wisely and reduce bad debt
• Be intentional with your mortgage strategy
• Stay informed about economic trends

Homeownership in Canada isn’t always smooth sailing, but with the right advice and planning, you can ride out any storm.