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A number of long-term mortgages have recently reached their end, leaving many people, including seniors on fixed pensions and low-income families, with no way to pay their newly-increased rates.

"People have overstretched themselves with their mortgage in the past," explained Brian Denysuik, president and CEO of Creditaid.

A combination of living beyond your means and rising interest rates can mean mortgage payments extend beyond the length of the original mortgage people agree upon, and can often result in new rates that individuals struggle to pay.

These recent difficulties that many are facing are something Denysuik believes has to do with a societal shift in thinking regarding the paying-off of mortgages.

"Back in the day, your goal was a 25-year mortgage, you started young, you were 20, 25 [years old]. By the time you were 50, 55 [years old], your house is paid off."

But Denysuik says this mindset isn't the case anymore with many homeowners.

"Now we're so much more of an instant gratification society that we look at our house and we want bigger, we want better. We want to do a whole bunch of modifications so we use the equity to put all new cupboards in and granite countertops, and we keep driving that same mortgage higher and higher."

While these renovations may increase the value of your home, it also increases the payment on your mortgage and can result in debt remaining on your home even after your mortgage has ended. At this point, as you're most likely beginning to look towards retirement and a fixed income, it becomes much harder to deal with the cost of living.

"As a result, they're having to make some tough choices later in life," says Denysuik.

This might include selling your home and moving into a rental option. While not a negative option, it's a difficult decision to have to make, Denysuik explains, because of our own emotional connections to our homes.

"It's where we've possibly raised our children, we've got so many great years of memories here and we've accumulated a lot of things and we don't want to let any of them go."

To avoid this, the CEO recommends examining your mortgage before it is due to end. "The challenge with renewing is that, if you're in that predicament, you don't have as much negotiating power with your financial institution to try and talk down your rate."

It all boils down to living within your means, says Denysuik, and a little planning is sometimes all it takes to get yourself and your finances back on track.

A detailed budget is the main thing Denysuik suggests when re-examining your finances.

"'Where is my money going? Can I afford, is there room in my budget to afford the $100 or $200 a month that this [payment] is going to cost me?'" are the questions that Denysuik recommends you ask yourself should you find yourself in a situation where increased mortgage rates are affecting your finances. "If that answer is no, the next stage is to create a budget in the rental world."

Denysuik says that though this may require some significant life changes, it's a step that can put you back on solid ground financially and in doing that, save you from immense stress. "It will give you a lot more choices than homeownership."

Most importantly, remember that it is possible to recover from a difficult mortgage situation, that alternative options do exist, and that simple changes can make a world of difference when dealing with finances.

"It's as simple as 'spend less than you make, and make sure you have [accounted] for everything that you need to,'" says Denysuik.

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