Lower your payments or access your home equity — and get out from under rising debt or a growing wish list.
One mortgage payment at a lower rate may offer you the chance to tidy up your finances for now and later.
Spending in the first half of the year can pile up fast. Or with the cooler weather, perhaps you're thinking of your personal, financial or property wish list, and need the funds to get going.
With the summer holidays all spent, a fall mortgage refinance can help you:
Let's explore how this strategy can simplify your financial plans — so your money works where you need it most.
| What you need | How a refinance may help | |
|---|---|---|
| 1. 'Un-rack' racked-up sources of debt | Bring your debts together in one place, saving money and time, with a much lower interest rate than a credit card | |
| 2. Get out from under higher prices all around | A home-equity-funded reprieve can help you reset your budget and goals | |
| 3. A leg up on minor home upgrades | Increase your home's value and take care of your investment (your home) | |
| 4. Funds for other investments, such as stocks, bonds, or a second home | Add to or diversify your investment portfolio to grow wealth or plan your retirement | |
| 5. Gain additional income sources | Invest in a rental property or add a self-contained suite to rent out | |
| 6. Upgrade your education (or fund your kid's or grandkid's) | Support your personal or family goals through one mortgage payment | |
| 7. Extend your amortization | Lower your mortgage payments by spreading them out |
A mortgage refinance involves replacing your current mortgage with a new one, increasing your mortgage balance so that you can draw funds from home equity to use as needed.
You'll pay these funds back through one mortgage payment, typically with much lower interest costs than credit cards or personal loans. It can simplify your finances, rather than having to track all your other debt payments or possibly deal with ballooning interest charges.
The amount you can borrow against your home equity depends on how much you have built up (referred to as your LTV, or loan-to-value ratio of your home) and qualification details. The lower your LTV, the more funds a lender may allow you to access and add to your mortgage balance.
Once your refinance is approved, your mortgage broker or lawyer will advise when and how the lender will release the funds for your use.
If you wait until your mortgage renewal period, you won't pay penalties to make major changes, such as a refinance.
Tool tip: Get a friendly reminder when it's your time to renew.
You'll likely pay a pre-payment penalty, and fees may be incurred, depending on your contract terms and whether you have a variable or fixed rate mortgage. Some lenders may offer lower penalties or cover some fees, such as our in-house CMHC-approved THINK Financial.
A lender can often roll a portion of these costs into the new mortgage, and you may still come out ahead in savings depending on your situation.
Read more: How much will it cost to break your mortgage?
Refinance rates may be higher than typical renewal rates because you're borrowing more and reducing your home's LTV. However, using an expert, salaried mortgage broker can help you find the best rate for your situation.
Refinancing in the fall can help you reset your goals and financial recovery before year-end, offering a sense of stability and confidence, and even relief:
You may need a short-term solution instead of a refinance, for example, if you need to upgrade your home to sell it, clear taxes owed to switch lenders, or a divorce payout to keep your home.
At True North Mortgage, we offer more flexibility than the big banks, and we may be able to find a cost-effective mortgage solution to support your situation.
Read more on our page for Complex Mortgages.
Your expert True North broker can offer unbiased advice on whether a refinance is the right move for you — our service is free and there's no obligation.
We can help ensure transparency on any penalties or fees, and pass along a volume discount for your best rate, which is likely to be much lower than other credit sources, such as credit cards, personal loans or some lines of credit.
With over 16,000 5-star reviews and counting, we're your fallback for exceptional mortgage support.
Refinancing may save you cash, or offer up needed funds. We'll help sort it out.
Your bank wants you to stay (mum) and accept your first renewal offer. Don't, until you read this.
Want to lower your payments or qualify for more home? A 30-year (or longer) amortization may help.
