What to Expect
How to refinance your mortgage
Break your existing mortgage contract early
Add a home equity line of credit (HELOC)
Blend and extend your existing mortgage
Costs of refinancing your mortgage
The Reasons Explained
Getting a lower interest rates
Refinancing to get a lower interest rate can save you a lot of money over time, depending on the prepayment penalty and the size of your outstanding mortgage. If you hold a variable rate mortgage, then expect to pay a penalty of three months interest, and if you hold a fixed rate mortgage, then you will pay the greater of three months interest or interest rate differential penalty (IRD). Don’t let penalties deter you – understanding the numbers helps you calculate whether a refinance will save you money.
To access equity (cash) in your home
By refinancing your mortgage, you may be able to access the equity in your home. You could potentially access up to 80% of your home’s value, less any outstanding debt. That’s extra money for investment opportunities, home renovations, or your children’s education. There are several ways to access this equity including breaking your mortgage, taking on a home equity line of credit (a HELOC), or blending and extending your mortgage with your current lender.
Refinancing to consolidate debt
If you have enough equity in your home, you might be able to use built-up equity in your home to pay-out high-interest debt through a mortgage refinance. For example, if you have a number of outstanding debts, such as a car loan, a line of credit, or credit card bills, you may be able to consolidate this debt through the variety of mortgage refinance options available.
Pre-Approval
Meeting Conditions
Funding
Closing
The Method and the Process
How to refinance your mortgage
Add a home equity line of credit (HELOC)
Costs of refinancing your mortgage
If you are breaking your mortgage in the middle of your term to access equity or lower your interest rate, your lender will charge you a prepayment penalty. For fixed mortgage rates this penalty is the greater of three months interest or the interest rate differential payment (IRD). For variable mortgage rates this is simply three months interest.
Break your existing mortgage contract early
Blend and extend your existing mortgage
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