Equity can solve a cash-flow problem or just delay it. Putting debt into the mortgage lowers the payment. But a balance that would take three years, spread over twenty-five, costs more in total interest.
What it really costs
Set the penalty, the fees and the new term next to the monthly saving. Divide the penalty by that saving. If you get more than the months left in your term, you’re losing money on the move.
Look ahead to the next term
A refinance has to leave a payment you can carry at the next renewal, not just now. What happens to it if rates are higher when the new term ends?
Documents to gather
What the lender will ask for.
Mortgage balance now
Property value
Debts or project to fund
Penalty to break
Payment after refinancing
Equity you can access
Frequently asked
Which documents should I 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.
