Refinancing Your Mortgage

When does it make sense for a mortgage re-do? We outline your best options — at your best rates.

Whether you want to tap the equity in your home, consolidate debt at a lower rate, or extend your amortization, refinancing can be the right choice, for the right reasons.

Does refinancing make good (mortgage) sense?

There are some good reasons why you might be considering a mortgage refinance.

This product can help you access extra funds through your home equity or harness helpful mortgage options (such as extending your amortization for lower mortgage payments) when you need it.

It's not a given that refinancing is always your best option — there will likely be fees and charges involved, especially if you decide to break your term to get it done.

But there are circumstances when a refinance makes real financial sense. Let's take a look.

Did you know?

Refinances are usually uninsured (called conventional) mortgages, allowing you to access up to 80% of home equity (for a loan-to-value of 80% or lower).

Starting January 15, 2025, eligible homeowners who want to build a secondary suite can access an insured refinance for up to 90% of their 'improved property' value (capped at a $2M home value) for construction funds.

What is a refinance?

A refinance means breaking your current terms and conditions to create a new mortgage with new terms and conditions — whether with your current lender or a different one.

The right time to refinance depends on your needs and situation. You may want to wait for your renewal (which comes without pre-payment penalties incurred to break your term).

You can refinance at any time if you feel the benefits of accessing helpful funds or options outweigh the costs of breaking your existing contract.

Occasionally, a lender may allow a refinance mid-term, sometimes called a blend-and-extend, which can help you keep a lower rate (fees may apply).

What is the difference between renewing and refinancing?

A renewal resets your next term, keeping the same mortgage terms and conditions (though hopefully with a better-negotiated rate).

When your renewal period comes up, usually about 4-6 months before the maturity date, you can agree to re-sign with your current lender or switch to a different one.

A refinance changes your original terms and is usually an uninsured mortgage product, which means a homeowner can no longer access lower insured mortgage rates.

Get a helpful renewal reminder here! And don't forget to check with us to ensure you get your best rate and product.

What are some pros and cons of refinancing?

The Pros: Refinance to access funds or specific mortgage features

Unlocking up to 80% (or 85%, depending on the lender) of your home's value — or finding a better mortgage solution — can help address various needs, including:

Gaining extra funds for investment purposes, such as for stocks or a down payment toward a second home or rental income property
Saving money by locking into lower rates or protecting against future rate increases
Extending your amortization to 30-years (or more) for lower mortgage payments
Consolidating higher-interest debts, such as credit cards, car loans, and lines of credit, into a lower-rate mortgage and one monthly payment
Combining first and second mortgages for the ease of one mortgage payment
Improving resale value through minor home or property upgrades
Switching to a different mortgage product for more flexible features (such as better pre-payment privileges, porting, or recasting)
Adding someone to the mortgage for credit purposes (co-signer or guarantor) or co-ownership or multigenerational setups
Removing someone from the mortgage title, such as a previous guarantor, spouse, or common-law partner

The Cons: Extra costs of a refinance

A refinance typically means you'll pay a slightly higher rate, especially if you had a default-insured mortgage previously (which offers access to lower rates).

Breaking your original mortgage terms also means your mortgage needs to requalify through the federal mortgage stress test, which may affect how much funds you can access.

Plus, there may be additional fees and charges you may face:

Mortgage registration fee (varies by province)
Legal fees (a lawyer may need to oversee your new mortgage)
Appraisal fee (a lender may want your home appraised for your new mortgage)
Mortgage discharge fees if you switch to a different lender
Mortgage pre-payment penalties to make up for interest that you had agreed to pay
Increased mortgage balance or longer amortization can result in paying more interest over time

Keep in mind that many of our True North clients benefit from a refinance, over and above any additional costs.

You can use flexible pre-payment privileges or change your payment frequency later to pay down your mortgage balance or shorten your amortization when it works for you.

Our friendly, highly-trained brokers are here to help you determine your refinance numbers and details for an accurate (mortgage) picture for clearer decisions — and offer strategies to reach homeowning success.

What is the refinance process?

A refinance can take approximately 3-4 weeks (or more) to finalize the details, especially since an appraisal is usually required.

So, if you're thinking about a refinance, make sure to allow enough (mortgage) time, regardless of whether you're waiting for your renewal period, switching lenders, or breaking your term.

Your expert True North broker will need certain financial details and documents from you, similar to when you first applied for your mortgage.

We'll help make it simple and stress-free, walking you through the process and answering your questions — and then you're off to a new mortgage agreement that works better for your situation.

Is it your time to refinance?

Ask yourself:

Are you considering buying a rental income property and need cash for the down payment?
Are you tired of making multiple (four or five) different debt payments, or only minimum payments, each month?
Do you want to share mortgage responsibilities with family or close friends?
Are creditors charging higher interest rates than today's current mortgage rates?
Do you wish you had more money to purchase stocks and bonds or make other financial investments?

If you answered 'yes,' our salaried, non-commissioned True North Mortgage brokers are here to help you, in your preferred language, with unbiased advice to find the right fit while saving you money, time, and stress.

Have more complex mortgage needs? We have more flexibility than the big banks, and we can consider your big picture for targeted short-term mortgage solutions.