Home ownership is a dream for many and comes with significant financial responsibilities. One of the most significant challenges homeowners face is effectively managing their mortgage cashflow. If you are a first time buyer or seasoned homeowner/investor, unexpected expenses or changes in income can create cash flow hurdles. In this post, I will explore common cashflow challenges and tips to help you navigate them.

If you have variable income streams, self employment, seasonality of income, best is to set money aside for leaner income periods, set a strict budget and try to cut expenses where possible or seek alternate streams of income for these challenging periods (rental of a room, Air BnB, foreign students, etc.)

In the current high interest rate environment, this one is certainly a hot topic. At minimum, an annual review with your mortgage broker to strategize and keep updated on current rates, trends and choosing terms that move in time with the market. Options include, shorter term fixed rate mortgages, extending amortization out to 30 years to assist with lowering payments.

If possible, make sure to have set aside some savings to cover the unforeseen expense or request an unsecured line of credit from your lender or Financial Institution so the their is quick access to cash to cover expenses that may occur.

A close analysis of monthly expenses, review of bank and credit card statements to see where trimming might be possible, even starting with frequency of restaurant visits, streaming services (how many and do I really need all of them), and even expenditures on coffee and croissants on the way to the office…

A deeper analysis of what debts you have, what interest rates, minimum payments am I making? Could consolidating those debts onto the mortgage reduce my monthly expenses and get me ahead and on solid ground moving forward.

Given today’s high interest rate environment, overall cashflow challenges are indeed a significant concerns for many Canadian households. Careful, Detailed and Proactive planning can help you to stay informed on current market trends (i.e. interest rate forecasts), build an emergency fund and reduce cashflow to ensure your mortgage remains manageable during these challenging times.

Professional advice from a mortgage broker is always a wise choice.