Equity can fix a cash-flow squeeze, or only push it back. Rolling debt into the mortgage cuts the payment. But a three-year balance stretched over twenty-five years costs more in total interest.
Work out the real cost
Put the penalty, the fees and the new term against the monthly saving. Divide the penalty by that saving. If the answer is more than the months left on your term, you lose money.
Think about the next renewal
A refinance should leave you with a payment you can carry at the next renewal, not only today. Ask what it becomes if rates are higher when the new term ends.
Documents to gather
What the lender will ask for.
Mortgage balance today
What the property is worth
Debts or project to finance
Penalty to break the mortgage
The new payment
Equity you can use
Frequently asked
What documents do I need to gather?+
Your last two notices of assessment, recent pay stubs, an employment letter, three months of bank statements and proof of your down payment. Add a list of your debts with balances and monthly payments. Have them ready before you make an offer, or a short financing window becomes unrealistic.
Current rates
Today’s rates, with the fine print.
These rates are indicative. Yours depends on your file, the type of mortgage (insured or not) and the lender. And look at the penalty too, it matters as much as the number.
Buying, renewing, refinancing, or something a bit out of the ordinary: tell us where you’re at, even if it’s still fuzzy. Mathieu gets back to you with next steps and the documents to pull together.
