Refinancing
Definition
Refinancing means replacing your existing mortgage with a new, usually larger one — often to access equity, consolidate debt, or change your rate and structure mid-term.
How it works
Because you are breaking the existing contract, refinancing before maturity normally triggers a prepayment penalty, plus legal, appraisal, and registration costs. The question is always whether the benefit outweighs those costs.
Refinancing is capped at 80% of the property's appraised value in Canada, and refinanced mortgages cannot be insured — so the equity you can access is limited by that ceiling, not by what you owe.
The most common reasons are consolidating high-interest debt into a much lower mortgage rate, funding a renovation, or buying another property. It can also be used to lengthen the amortization and lower a payment that has become unmanageable.
Quick facts
- Limited to 80% of appraised value.
- Breaking mid-term usually triggers a penalty.
- Common uses: debt consolidation, renovations, equity access.
Put this into practice
Still have questions about refinancing?
Call for a free, no-obligation conversation about your situation.
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