Rolling debt into the mortgage lowers your payment. But a three-year balance stretched over twenty-five years costs more in total interest. Sometimes you’ve fixed the cash flow, sometimes you’ve only pushed the problem back.
Do the full math
Put the penalty, the fees and the new term next to the monthly saving. Then divide the penalty by that saving. If the answer is higher than the months left in your term, you lose money.
Think about the renewal
The payment has to hold up at the next renewal, not only this month. Ask yourself what it becomes if rates are higher when the new term ends.
Documents to gather
What the lender will ask for.
Balance on current mortgage
Property value
Debts or project to finance
Mortgage penalty
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. Add a list of your debts with balances and monthly payments. Get them together before you make an offer, and 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.
