Suppose your mortgage is coming up for renewal, and you’re concerned about the potential economic impact of tariffs (or any broader economic uncertainty). In that case, you can take a few innovative steps to protect yourself and make informed decisions. When it comes to tariffs, rates, and renewals, here’s what every homeowner needs to know now:
1. Review Current Rates and Options Early
Don’t wait until your renewal date. Start looking at options 3 to 6 months before your renewal.
You can contact your current lender to see what they’re offering, but you can also shop around for better rates or terms.
2. Consider Locking in a Rate
Interest rates could rise if tariffs (or other economic events) trigger inflation or supply chain issues.
Locking in a fixed rate now could provide stability if you’re worried about future rate hikes.
3. Weigh Fixed vs. Variable Mortgages
Fixed-rate mortgages offer predictability — ideal if you expect uncertainty in the economy.
Variable-rate mortgages tend to offer lower rates initially, but they could rise if the economy reacts negatively to tariffs (e.g., higher inflation, rate hikes).
4. Stress Test Your Budget
Run your numbers to see how much you could afford if rates increase.
If tariffs or other economic shocks increase the cost of everyday goods, you want to ensure that your mortgage payments are still manageable.
5. Consider Shorter Terms if Unsure
If rates stabilize or drop after the initial uncertainty passes, you could consider a shorter renewal term (1-3 years instead of 5 years).
6. Build in Flexibility
Look for mortgages with flexible prepayment options to pay down faster if you’re in a good financial position.
Avoid products with high penalties for breaking the mortgage early if you need to refinance.
7. Keep an Eye on Inflation & Interest Rate Announcements
Tariffs can fuel inflation if they increase prices on imports.
The Bank of Canada may adjust interest rates in response.
Staying informed will help you decide whether locking in or going variable is the safer bet.
8. Give me a call!
I have access to more lenders and products than your bank.
I can help you assess risk factors (like tariffs or broader economic uncertainty) and recommend options tailored to your situation.
Bottom Line
Economic uncertainty—caused by tariffs, global trade issues, or other shocks—makes it even more important to proactively review your mortgage options and build flexibility into your financial plan. Acting early, staying informed, and getting advice can help you weather whatever’s ahead.
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