Equity can solve a cash-flow problem, or only delay it. Consolidating debt into the mortgage brings the payment down. Stretch a three-year balance over twenty-five years, though, and you pay more interest overall.
Add up the full cost
Compare the penalty, the fees and the new term with the monthly saving. Divide the penalty by the saving. Result higher than the months left in your term? The move loses money.
Where you land at renewal
The payment has to hold at the next renewal too, not only today. Ask yourself what it looks like if rates are higher when the new term ends.
Documents to gather
What the lender will ask for.
Current mortgage balance
Value of the property
Debts or project to pay for
Mortgage penalty
New payment
Equity available
Frequently asked
What documents should I pull together?+
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.
