Get a much more favorable loan term.
A mortgage refinance basically means getting rid of your original mortgage and replacing it with a new mortgage. By refinancing you get a complete overhaul with better mortgage terms, either with the same or a new lender.
Why You Should Refinance Your Mortgage
- To get a lower interest rate
Mortgage rates are adjusted regularly in Canada, and if current rates are lower you can end up with a lower rate, which can save you thousands of dollars on interest over time. If interest savings are more than your prepayment penalty, it makes good financial sense to refinance.
- To access equity in your home
By refinancing your home, you can borrow up to 80% of its estimated net worth. You can access this extra cash to finance your projects, such as for renovating your home, to buy a second home, or car or other big-ticket item or to help finance your child’s education. Refinancing also allows you to add a HELOC to your current mortgage if your original mortgage did not include one.
- To consolidate your debts
If you have growing high-interest debt that may be hard to repay, refinancing is a great source of credit which you can use to consolidate your debts. Mortgages are essentially secured loans and have lower interest rates compared to other sources of credit, like credit cards or personal loans. By refinancing, you can borrow up to 80% of your home’s equity and use that cash to pay off high interest debts and make one easy payment each month at a lower overall rate.
Mortgage refinancing is risky, particularly if you incur a large prepayment penalty from breaking your mortgage early. However, don’t let penalties deter you from refinancing your mortgage. I can help you understand the numbers and determine whether a refinance will save you money and if it is your best option.
Call or email me today to get a free personal assessment and a FAST mortgage pre-approval!