1. Evaluate Your Goals
Why are you refinancing?
- Need cash for renovations, investments, or debt?
- Want lower monthly payments?
- Want to switch from a variable to a fixed rate (or vice versa)?
2. Check Your Home Equity
Lenders allow you to borrow up to 80% of your home’s appraised value.
Example:
- Home Value = $900,000
- 80% = $720,000
- Current Mortgage = $500,000
- Equity Available = $220,000
3. Shop for Rates and Lenders
Compare offers from:
- Your current lender (renewal or blend-and-extend option)
- Other banks or credit unions
- B-lenders or mortgage brokers if you have bruised credit or are self-employed
4. Submit an Application
You’ll need:
- Government ID
- Proof of income (pay stubs, T4s, NOAs)
- Mortgage statement
- Property tax bill
- List of debts (if consolidating)
5. Get a Home Appraisal
Lenders require an appraisal to determine your property’s current market value.
6. Review Approval Terms
Once approved, you’ll receive a mortgage commitment with:
- Loan amount
- Interest rate
- Amortization (typically 25–30 years)
- Monthly payment
- Fees, penalties, or conditions
7. Sign with a Lawyer
Your lawyer:
- Pays off the old mortgage
- Registers the new mortgage
- Releases any extra cash to you (if cash-out)
- Handles payout statements and legal documentation
8. New Mortgage Begins
You start making payments under the new terms.
⚠️ Costs to Consider
- Prepayment penalty (if breaking a fixed-term mortgage)
- Legal fees ($1,000–$1,500 typically)
- Appraisal fee ($300–$500)
- Discharge fees from the current lender
- Broker or lender fees (if using a private or B-lender)
✅ When Refinancing Makes Sense
- Interest rates have dropped
- You’ve built up equity and need access to cash
- Your credit has improved since you got your last mortgage
- You want to consolidate high-interest debts (credit cards, personal loans)
Thinking about refinancing? It’s smart to work with a mortgage broker who can help you weigh your options, compare lenders, and avoid common pitfalls. Feel free to fill in a quick form below to get matched with a licensed Canadian mortgage broker.
