Refinancing your home

If your financial goals include making a large purchase, completing a home renovation, or consolidating debt, you may want to consider refinancing. There are two types of refinancing:

1. Renegotiating your mortgage contract

If you are looking to renegotiate your mortgage contract, you’re essentially paying off the mortgage you currently hold and replacing it with a new one. This solution comes with some extra fees and penalties associated with breaking a term. However, with our blend and extend option, you may be able to combine your existing mortgage rate with current rates to create a new blended rate while also extending your mortgage term. 

When to consider renegotiating your mortgage contract

• When rates drop substantially: If your mortgage interest rate is substantially higher than current rates, refinancing your mortgage may save you a lot of money. However, it’s really a numbers game that’s based on the amount you’d pay in fees and the amount you’d save in interest over time.
    
• If you’ve had a change in finances: If your financial circumstances have changed since you purchased your home and the cost of your mortgage has become too much for your budget, your first step should always be to speak with a lending specialist. In this case, you may have the ability to extend your amortization schedule, reducing your monthly payment to keep your home affordable.

2. Tapping into your home equity

Refinancing your home doesn’t always mean breaking a mortgage contract — you also have the ability to use your home equity to borrow under a separate lending facility. This can help save money on penalties, while leaving your current mortgage intact. In order to refinance, you’ll need to have at least 20% of your home’s value available in equity.

When to consider tapping into your home equity

• Making a major purchase: If you’re planning for a large, one-time expense, refinancing your mortgage can be a great option to keep borrowing affordable and convenient. 
    
• Purchasing your next property: If you’re considering purchasing a rental property, you can tap into your home equity to help with the down payment. 
    
• Consolidating high-interest debt: When refinancing to consolidate debt, you can wrap up several higher interest payments into one single monthly payment at a lower interest rate. This can help keep debt manageable and save you money in the long-term.