Sometimes equity solves a cash-flow squeeze, sometimes it only postpones it. Folding debts into the mortgage does lower the payment. Still, a balance that would have been gone in three years costs more in interest once it is spread over twenty-five.
Do the full math
Line up the penalty, the fees and the new term against the monthly saving. Divide the penalty by that saving. If the result is bigger than the months you have left on your term, the move loses money.
Think about the renewal
The payment should still be manageable when this new term ends, not just next month. Ask what it looks like if rates are higher by then.
Documents to gather
What the lender will ask for.
Current mortgage balance
What the property is worth
Debts or project to finance
Penalty on the mortgage
New payment
Equity available
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, plus a list of your debts with their balances and monthly payments. Ready before the offer? Then a short financing window is realistic.
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.
