Mortgages
Mortgage Refinancing
Refinancing replaces your current mortgage with a new one, often at a better rate or with cash out for renovations, investments or consolidating high-interest debt. We calculate whether the numbers work before you break your term.
- Debt Consolidation
- Renovation and Investment Funds
- Penalty Analysis Before You Switch
- Up to 80% of Your Home's Value
When Refinancing Makes Sense
Refinancing is worth it when the savings or the use of funds outweigh the cost of breaking your current term. We run the calculation for you and show you the break-even point.
- Consolidating credit cards and loans into one lower payment
- Funding a renovation, a down payment on a second property or a business
- Switching from variable to fixed, or extending your amortization to lower payments
Penalties, Explained
Fixed-rate mortgages usually charge the greater of three months' interest or the interest rate differential. Variable mortgages usually charge three months' interest. Your payout statement is obtained and the penalty is factored into the recommendation.
FAQ
Common Questions
How much can I borrow when I refinance?
Up to 80 percent of the appraised value of your home, less the balance of any existing mortgages.
What does it cost to break my mortgage before the term ends?
Usually a prepayment penalty. On a fixed rate it is often the greater of three months' interest and the interest rate differential; on a variable rate it is usually three months' interest. The exact figure is obtained from your lender before any recommendation is made.
Do I have to pass the stress test to refinance?
Yes. A refinance is new borrowing, so the lender qualifies you at the minimum qualifying rate, the greater of 5.25 percent and your contract rate plus two percentage points.
Will refinancing hurt my credit?
The lender checks your credit, which can lower your score slightly for a short time. If the refinance pays off credit cards or loans, those balances no longer show as owing on your credit file.
How long does a refinance take?
It depends on the appraisal, the lender's review and the lawyer's schedule. If you have a date to meet, such as a renovation start or a maturity date, tell us at the start so we can plan around it.
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