Throngs of homeowners desperately need to restructure their debt. But there are three key reasons why they can’t. Here they are, and here’s what to do about it if you’re in this boat.Until recently, median prices in most parts of Canada were down at least 20 per cent from the 2022 peak, to ballpark data from the Canadian Real Estate Association .
That’s why Canada’s latest upswing in prices is critical for many homeowners — particularly those blocked from refinancing because of their property value. Two exceptions for qualifying borrowers are when a lender allows “blends” or separate-portion mortgages. Blends effectively let you keep your existing low rate while the lender charges you current rates on any new money you borrow. Your old and new rates are combined into one new weighted average rate, which accounts for the balance of each portion.
more challenging. The stress test forces borrowers to prove they can afford a rate that’s the greater of 5.25 per cent or two percentage points above their actual rate. At these sorts of non-prime lenders, borrowers pay rates and fees that are a minimum of one to three percentage points higher than those of mainstream lenders.