We believe that selling your home should be the last resort however, if you absolutely have to sell your home this year, there are several questions to ask yourself before selling:

Have I calculated the cost of selling a home in 2023?

There are several costs to consider when selling your home which include, realtor’s commissions, mortgage penalties, discharge fees, legal fees, and possibly even capital gains taxes. It is important to consider all these costs when determining if selling your home is right for you. 

How much will it cost to break my mortgage?

If you are on a variable-rate or adjustable-rate mortgage, the lender will typically charge a 3-month interest penalty to break your mortgage. If you are on a fixed-rate mortgage, the penalty is calculated on the higher of the 3-month interest calculation or the interest rate differential.

Can I port my existing mortgage to a new property?

Especially if you were one of the lucky ones that locked in a low-rate mortgage in the past, there could be a possibility to port your existing mortgage to the new property to avoid any penalties. This would be subject to requalification. 

Will I still qualify for a new mortgage based on the current stress test?

The current stress test rules, which came into effect on June 1, 2021, require borrowers to prove they can handle either the minimum qualifying mortgage rate of 5.25% or their contract rate plus two percentage points, whichever is higher. With the current interest rates, lenders are qualifying borrowers based on a stress test rate as high as 9% in some situations. Therefore, there is a strong likelihood that the mortgage amount you would have qualified for in the past may no longer be close to the mortgage amount you would qualify for today.

Can I afford the monthly payments with today’s rates?

If you had a $500,000 mortgage at 3% in the past, your monthly mortgage payment would have been approximately $2,100 based on a 30-year amortization period. If you are to take the same mortgage today at $500,000 at 5.50%, for example, your monthly mortgage payment would be approximately $2,820 per month, based on the same 30-year amortization period.

Before selling your home, talk to us first.