Pierre-Antoine Fournier insists: he does not cause pity. Owner of a condo and a chalet, this 46-year-old freelance director is well aware that the rise in mortgage rates is much more catastrophic for certain households than for him… but he does not hide the fact that his recent renewal of mortgage loans a bit painful.
The director has three mortgages: two on his chalet in the Laurentians and one on his condo in Rosemont, Montreal. If he has two loans on his chalet, it is because major work, necessary following a flood, forced him to do so. “I had to flip my mortgage line of credit into a mortgage loan to get a better rate,” he explains.
In the last 18 months, this self-employed and single father has had to renew his three mortgage loans. And make choices.
From variable to fixed
Before his mortgage renewal, Pierre-Antoine Fournier had, for his three loans, variable rates renewable every year for five years. “I had a rate for one year, which was renewed five times. I had 2.5% for the first four years. It rose to 5% in the last year. ” And now ? “I signed at 4.6%, fixed for four years on the condo, but I signed shorter and higher – 6% – on the chalet because I think it will come back down, and also because like It’s rental income, the interest is tax deductible, so at the time it hurts, but at the end of the year I get part of it back. »
Pierre-Antoine Fournier used to negotiate his mortgages with Desjardins. This time, he did business with a broker.
PHOTO MARCO CAMPANOZZI, THE PRESS
Pierre-Antoine Fournier
The condo is my biggest debt and just one percentage point made a big difference. I went to get 1.5 percentage with a broker, that still means $3,000 per year.
Pierre-Antoine Fournier
Despite everything, he emphasizes that it would be impossible for him to remain the owner of his chalet – a family property that he bought following the death of his grandmother 20 years ago – if he did not did not receive rental income; income which has fallen by 15% to 20% since the end of the pandemic.
Extend depreciation
In order to reduce his monthly payments, Pierre-Antoine Fournier also had to extend the amortization of his mortgage loans. “I extended the maturity of two of my loans by 5 years, including the condo for 25 years. I still ended up, overall on the three loans, paying $400 to $500 more per month. If I hadn’t changed the terms, I would have paid $600 to $800 more per month. » An amount that has a big impact on its budget. On the other hand, in the long term, this strategy will make him pay more interest. But the director is hopeful that he will be able to adjust the depreciation once rates fall. “If it goes back to 3.5%, I will probably break my loan and pay a penalty. It’s all going to be a question of calculation. »
To keep hope
Before the rise in mortgage rates, Pierre-Antoine Fournier planned to sell his condo, a small 4 and a half, to buy something bigger. Today, this project no longer exists. “The small condo, with the small Hydro account and the small condo fees, that’s it for at least four years. » But only the father repeats it: he is not pitiful. “I am aware that my problems are the problems of well-off people. »
When he thinks about the future, he is a little stressed, but not pessimistic. “What saves me at the moment is that my properties have increased in value. My debt is much smaller than the value, so I stay with my feet on the ground and tell myself: at worst, I sell one of the two, I invest the money and I’m OK for a bit… but that’s it. I am sure that if my chalet is flooded again, there is no longer any calculation that holds. I am financially dead. »