Refinancing a rental property: the appraiser looks at market rent and comparables, and the lender counts only part of your leases. What that leaves you in equity.
Equity can fix a cash-flow problem, or it can only delay it. Adding debt to the mortgage lowers the payment. Spread a three-year balance across twenty-five years, and the total interest climbs.
Do the full calculation
Take the penalty, the fees and the new term and compare them with the monthly saving. Penalty divided by saving. If the result is more than the months you have left, the refinance costs you money.
Check the payment at renewal
A refinance has to work at the next renewal as well, not only now. Ask what the payment becomes if rates are higher when the new term ends.
Documents to gather
What the lender will ask for.
Current mortgage balance
Property value
Debts or project to finance
Mortgage penalty
New payment
Available equity
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 the current leases and records of the rent actually collected. Ready before you make an 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.
