Lower your monthly payments, reduce interest costs and get out of debt faster, all while increasing your cash flow.

Are you getting the best deal on your interest rate? Do you need to access cash to pay off debt and credit cards?

Would you like to simplify your budget?

Refinancing your existing mortgage and consolidating your loans is a great way to address all the above, especially if you are carrying large monthly payments. Your Mortgage Advisor can show you how to leverage your home equity, using it as a low-cost way to borrow money that can be a better option than traditional loans or lines of credit.

Use these funds to pay off debt, help your children through secondary school, renovate your home, buy a car or an investment property, or to reinvest. In addition, take advantage of better interest rates when they drop below your current percentage.

Why Refinance a Mortgage?

Refinancing is an option that takes your current mortgage, whether mid-term (with a penalty) or at renewal (no penalty), and allows you to access equity to borrow additional money. This also creates a new term for the mortgage. Check if you can refinance by using our Mortgage Calculator.

Here are just a few reasons why refinancing your existing mortgage can make sense, depending on your situation:

Lower Your Interest Rate

Ever hear of rate-and-term refinancing? This is the process of setting up a refinancing plan for your existing mortgage balance, but with an interest rate that is lower than before. The key here is to refinance your mortgage for as little as possible – the bigger the difference, the more you will save in the form of lower monthly fees. This can add up exponentially over time.

Need to Make a Purchase? Use Your Home Equity

Your home equity has more power than many may realize. Refinancing with the help of a Mortgage Advisor – therefore getting the lowest interest rates possible – makes it possible to access most of the property’s appraised value. This is useful for everything from real estate investments to funding renovations, the latter of which will help to drive up your equity even further in the long run.

Consolidating Debt

Did you know that your home equity can also be used to pay off outstanding debts? This can be useful if the interest for a refinanced mortgage is lower than that of your established line of credit, credit card bills or otherwise. Refinancing to consolidate debt is an ideal way to reduce long-term interest accruement, and we at the Mortgage Advisors are happy to help you identify whether the value of your home would sufficiently translate to such savings.

Backing Out of Your Existing Mortgage

We can help you ascertain whether it’s more feasible to prematurely end your existing mortgage contract. This grants you the ability to shop around for more modern-day, competitive rates reflective of current market conditions. We’re happy to assist with finding an ideal lender and ensure the best possible value.

Creating a Home Equity Line of Credit

As noted, your property value can further justify refinancing. If it’s high enough, we can turn your home equity into a dedicated secure loan. Like any loan, you’ll accrue interest if you owe on it, but the rates will be considerably less than a conventional line of credit. Speak with us today to find out whether this is a possibility for you.

Frequently Asked Questions

What is mortgage refinancing?

Refinancing a mortgage involves obtaining a new mortgage loan to pay off your original mortgage loan. In many cases, homeowners will refinance to take advantage of lower interest rates, and often access equity to pay off other debts for investments, renovations or home improvements, or for other major purchases. A mortgage refinance could happen mid-term of your current mortgage or at maturity. It is important to understand the penalties of breaking your mortgage midterm to determine if it makes sense financially.

Why refinance a mortgage?

Refinancing a mortgage allows you to access equity (up to 80% of the current value of your home) by paying off the original mortgage you can access additional equity available to pay off debts that are often at higher interest rates or monthly payments and free up your budget to increase cash flow. You can also access equity for investment reasons, perhaps the down payment to purchase an investment rental property or invest into RRSPs. Major renovations and home improvements can be costly and borrowing from the equity in your home can be less expensive than borrowing on unsecured lines of credit or credit cards.

How does refinancing a mortgage work?

Refinancing a mortgage can be similar to buying a home, both start with an application and verifying income and credit to ensure you qualify to borrow the mortgage amount. From there, once we have reviewed the lenders and options, we would get a mortgage commitment from the lender which outlines the conditions for the approval. The next step would be for an appraisal to determine the Current Market Value of your home. With the mortgage approval conditions met and the appraised value confirmed the next step would be to meet with your lawyer or a closing title insurance company to review the terms of the mortgage and register and disburse the funds of the new mortgage. The original mortgage would be paid and discharged and the new mortgage registered.

When should you refinance your mortgage?

Refinancing your mortgage could depend on a number of factors. Lower interest rates and an increase in home values tend to be a driving force for those looking to refinance, but an important consideration point is your current mortgage. If your current mortgage is coming up for maturity that is the optimal time as there are no prepayment penalties to worry about. If you are midterm then determining if your penalty is 3 months interest or an Interest Rate Differential penalty can be the deciding factor if it makes sense to refinance or not. If you can recoup the penalty that has to be paid with the savings in interest over the new term often it can be worthwhile. Other times the penalty may be too high and waiting until maturity may be the better decision. 

Is there a downside to refinancing?

The number one downside to refinancing is that you will incur some additional costs with both the appraisal fee and the legal fees associated with discharging and registering the new mortgage. These costs are typically offset with lower interest rates and lower monthly payments of a mortgage when comparing to carrying unsecured debts, loans or credit cards. The next downside to refinancing to pay off other debts is the amortization you choose. If you keep adding additional funds to your mortgage, extending out the amortization and reusing those credit facilities, you could end up paying more in the long run. Setting your mortgage terms to your financial goals is important.

What should I watch out for when refinancing?

When you’re looking to refinance there are a few key things to watch out for. Know your home value and if there is equity available, your credit should be in good standing. Your income should be stable and your debt to income ratio should be in line with bank qualification requirements. The costs associated with refinancing and the break-even point to compare savings in the new mortgage to offset potential penalties to break your mortgage are all things to watch out for when refinancing.

Where do I start to refinance my mortgage?

The best place to start is with one of our mortgage agents who can assess your current situation with a credit application and your current income and mortgage statement documents. We can help you get an idea of what your home may be worth, what your penalty costs may be, and advise on the options and savings available to you.

Can you refinance a mortgage anytime?

Refinancing your mortgage will depend on the mortgage you currently have registered against your property. Some mortgages do not allow you to break midterm unless you have sold your property. Variable rate mortgages are flexible and typically only have a 3-month interest penalty, while fixed rate terms will have the greater of 3 months interest or IRD (Interest Rate Differential) penalties and each lender will have various ways of calculating those IRD penalties. If the penalties are too high waiting until maturity may be the better option.

Ready to Refinance Your Mortgage? We Can Help!
Contact Us Today.

The Mortgage Advisors team is prepared to deliver informed, professional insights that harness a thorough understanding of current market conditions. Whether you want an up-to-date calculation of your home equity or to discuss refinanced mortgage rates, we would be happy to work out suitable options for you. Get in touch with us today to schedule a consultation.

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