Equity can ease a tight budget or just hide the problem for a while. Consolidating debt into your mortgage lowers the payment. A balance that would have been gone in three years, spread over twenty-five, costs more in interest in the end.
The math, in one line
Take the penalty, the fees and the new term, and compare them to the monthly saving. Penalty divided by saving. Higher than the months remaining in your term? Then you’re losing money.
What about the next renewal?
Fine if the payment works today. It also has to work at the next renewal. Try a higher rate and see what the payment turns into.
Documents to gather
What the lender will ask for.
Current mortgage balance
Property value
Debts or project to finance
Penalty amount, in writing
New payment
Available equity
Frequently asked
Which documents will you ask me for?+
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. Ready before the offer, they make a short financing window 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.
