It can solve a cash-flow problem, or just delay it. Consolidating debt into the mortgage lowers the payment, yes, but a three-year balance spread over twenty-five years costs more interest overall.
Work out what it really costs
Line up the penalty, the fees and the new term against the monthly saving. Divide the penalty by the saving. If the result is bigger than the months left in your term, the move loses money.
Look past today’s payment
The new payment should still be manageable at the next renewal. Ask what it becomes if rates are higher when the term ends.
Documents to gather
What the lender will ask for.
Mortgage balance now
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. Have everything 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.
