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Your mortgage refinancing

Perhaps you need cash to finance a real estate project (e.g., a cottage) or a personal project (e.g., foreign travel)?

If you already own a home, refinancing is an interesting option that allows you to source new mortgage on your property up to a maximum of 80% of its market value.

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mortgage refinancing


What is a mortgage refinance?

Refinancing your mortgage is the renegotiation of your existing loan. It is a transaction between you, the borrower, and a financial institution willing to evaluate your property and lend you money accordingly. Ultimately, you can leverage your home’s equity to consolidate debt, or fund other projects, by increasing the balance owing on your mortgage.

A mortgage refinancing is carried out under the same conditions as a traditional mortgage’s financing. After analyzing your borrowing capacity and consulting your credit score, the financial institution offers you financing at a rate according to current market conditions, rather than your original conditions.

In recent years, the consistent decline in interest rates has allowed Canadians to benefit from their decrease when refinancing, thus making the operation increasingly attractive! However, their rise since January 2022 has changed the appeal significantly. Rest assured that our team remains on the lookout for market fluctuations to give you the right information every time!

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Why and when to refinance?

Given the large sum of money involved, we emphasize that mortgage refinancing is not a solution to take lightly. In other words, it is only appropriate when you need a significant amount of money.

Clients who use our services typically request refinancing in any of the following situations:

The list of projects that require large sums of money is nearly endless. Starting a business, taking a once-in-a-lifetime trip, retiring early, changing careers or financing a child’s education for example, are all situations that may require refinancing a mortgage.

We know major repairs (e.g., a roof replacement) and home renovations are costly! Months of savings may not suffice in funding your labour and materials. Refinancing your mortgage is a practical and justified solution. Especially as you are investing in your property’s upkeep and improvement!

Want to fund a business venture or take advantage of an attractive investment opportunity? Refinancing a mortgage gives you access to liquidity that can be used quickly. But be careful not to act on impulse. Borrowing to finance investment is not without risk, so seek professional advice to avoid regretting your over-enthusiasm!

Have you accumulated assorted debts (e.g. car, credit cards) that are keeping you up at night? Refinancing offers you the possibility of merging them into a single contract, with a single monthly payment, a lower interest rate and a reasonable mortgage penalty.


This approach has two main advantages:


1. By consolidating all debt into one contract, you simplify the management of your finances (and you’ll rest easier – poof – just like magic!);


2. You can negotiate future personal loans easier with a better credit score.

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How does refinancing work?

Mortgage refinancing follows the same rules as a traditional mortgage, with a few exceptions. Here are its steps:

If all conditions are met, refinancing allows you a loan up to 80% of your property’s market value. The financial institution granting the loan also considers and deducts the balance of your initial mortgage. For example, if you own a home valued at $400,000 and the balance on your current mortgage is $150,000, then maximum amount of your new loan is $170,000. Equal to ($400,000 x 80%) – $150,000 = $170,000

To submit your refinancing request, make an appointment with one of our brokers. They will explain various options or scenarios to you before presenting your file to the lender(s) you chose together.

Thoroughly consider the lenders offers. The best deal is the one that guarantees a good rate and favorable terms, providing you with comfort and results.

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What factors are considered for refinancing?

As with a conventional mortgage, a mortgage refinance depends on your borrowing profile and credit-worthiness. For this reason, the financial institution will analyze several pieces of information about you, including the following:

Are you employed or self-employed? How much do you earn per week, per month, or per year? This information reflects your ability to bring in money.

How much do you owe? Are you making your payments on time? The amount of debt and its nature are an indication of your money-management skill.

Do you have a detailed budget associated with your project? Lenders have a strong preference for realistic clients, those who know how to qualify and quantify their needs. We can help you with this step!

What does your credit history look like? Your credit score tells lenders what kind of borrower you are.

A well-located and well-maintained property is a stronger source of collateral – and therefore provides more security to the financial institution.

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The mortgage line of credit

An alternative: the mortgage line of credit

Unsure if refinancing is right for you? No worries! There is another flexible borrowing solution that may be of interest to you: a home equity line of credit (HELOC).

This product gives you access to a loan equal to 65% of your property’s market value. And unlike a regular mortgage, a HELOC provides great freedom in how you use the funds and how you repay the principal and interest.

In this case, the lender does not set any deadlines or prepare an amortization schedule. The line of credit is eligible for full repayment without penalty. In addition, it remains available and usable at any time, as long as you remain the owner of the mortgaged property. It must be said, however, that the mortgage line of credit requires more discipline, as you can easily become over indebted. It is ideal to use it sparingly or according to the recommendations of an expert!

Whether you opt for a standard mortgage loan or a HELOC, you have everything to gain by referring to the expertise of a Team Distinction professional, who will advise and accompany you at every step of your project.

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