Equity can ease a monthly squeeze, or it can just hold the problem off. Rolling debt into the mortgage lowers the payment. A three-year balance stretched to twenty-five years means more interest at the end.
Total cost, not just the payment
Add up the penalty, the fees and the new term, then compare with the monthly saving. Divide the penalty by that saving. If you land above the months left on your term, you lose.
Will it hold at renewal?
The payment must be manageable at the next renewal too. Ask what it 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 a list of your debts with balances and monthly payments. Ready before you make an offer, they keep 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.
