Refinancing your mortgage is a great way to consolidate and pay off your debt, make some much-needed renovations, or even pay for tuition. While refinancing is typically an easy and desirable process, it’s still important that you’re fully informed before deciding how to proceed with your mortgage options. Here is everything you need to know about refinancing your mortgage in Canada.

What is Refinancing?

Refinancing allows you to pay off your current mortgage and replace it with a new one. If you have at least 20% equity in your property, you are eligible for refinancing. Not only does refinancing allow you to pay off debts and put money towards renovations, new property, or educational costs; it also gives you the opportunity to find a more competitive mortgage rate for your current home.

Mortgage Penalties

One thing to consider before refinancing your home is the mortgage penalties you may incur. There are penalties associated with leaving a closed mortgage before a predetermined amount of time.

Refinancing Versus a Home Equity Line of Credit

Refinancing your mortgage should not be confused with a home equity line of credit (HELOC). A HELOC allows you to borrow from the equity of your property and pay it back, similar to how you would use a regular line of credit. Refinancing is essentially a “re-mortgage,” generally allowing you to access lower interest rates than a HELOC. Neither solution is better or worse than the other—they both have their advantages, and the option that’s best for you depends on your particular financial situation.

Many homeowners choose to refinance their properties for a variety of reasons. If you’re interested in refinancing your home, talk to one of our mortgage experts at Team Levine. We can guide you through the entire refinancing process from start to finish, answering any concerns you may have along the way while getting you the best rate possible. For more information about our refinancing services, contact us today!