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Mortgage Refinance In Ontario

When you refinance your mortgage, you pay off your old one and start a new one with the same or a different lender. You may want to refinance your mortgage to achieve a lower interest rate, access the equity in your home, or consolidate your debts. However, breaking your mortgage may result in a significant pre-payment penalty riskier mortgage refinancing. Ensure that you do enough research.

Reasons To Refinance Your Mortgage

Refinancing a mortgage is not just to obtain a cheaper interest rate. Refinancing your mortgage may also be utilized to access the equity in your house and consolidate your debts.

Getting A Lower Interest Rate

Depending on the amount of the pre-payment penalty and the size of your outstanding mortgage, refinancing to receive a lower interest rate may save you a significant amount of money over time. Those with variable-rate mortgages expect to pay a three-month interest penalty. Those with fixed-rate mortgages expect to pay the larger of three months’ interest or the difference between the variable and fixed-rate mortgage interest rate differential penalty (IRD). Don’t let fines dissuade you from refinancing; knowing the figures will assist you in determining whether or not a refinance would save you money.

Accessing Equity (Cash) In Your Home

The equity in your home could come out of your mortgage refinancing, so you might be able to get money out of it. You might be able to get up to 80% of the value of your home, minus any debt that you still owe. You can use the money for investments, home improvements, or your kids’ education. If you want to get this money, there are many ways, like breaking your mortgage, getting a home equity line of credit (HELOC), or getting a new mortgage from your current lender.

Refinancing To Consolidate Debt

As long as you have enough equity in your home, you might be able to use the money you have built up in your home to pay off debt with high-interest rates by refinancing your home. For example, if you have a lot of debts, like a car loan, a line of credit, or credit card bills, you might be able to get rid of them all by refinancing your mortgage. There are many different ways to do this.

More For You

What Are The Benefits Of Mortgage Refinance

  • Possibility of obtaining a cheaper interest rate and so saving money.What Are The Benefits Of Mortgage Refinance
  • Consolidate debt at a lower total interest rate.
  • Equity in your house.
  • Allows you to choose between variable and fixed interest rates.

How To Refinance Your Mortgage

There are many ways to change the terms of a mortgage. Breaking your mortgage contract early, getting a home equity line of credit, or extending your mortgage with the same lender are some things you can do.

Break Your Existing Mortgage Contract Early

If you wanted to get a lower interest rate or get money from your home, you might think about breaking your mortgage early. Remove your old mortgage and start a new one with any lender you want; in this case, Pre-payment penalties from your bank will be charged if you break your mortgage. These penalties are usually equal to three months of interest charges. The cost of the pre-payment penalty can be worth it if you can justify it with the new rate on your mortgage. Breaking your mortgage can still be worth it.

Add A (HELOC) Home Equity Line Of Credit 

In the case of a home equity line of credit, the money you have built up in your home can be used as you see fit. In many ways, a HELOC is like a credit card account. Because it’s a secured loan (based on the equity you have in your home), the interest rates are much lower. If you take money from it, you’ll have to make interest-only payments on the balance each month. You can get a line of credit for your home through your current lender and a small group of other lenders.

Blend And Extend Your Existing Mortgage

You might be able to get a “blended rate” from your current mortgage lender. This is a “blend” of your current mortgage rate and any extra money you borrow at current market rates. Blended rates are almost always higher than the best mortgage rates on the market, so make sure you compare the blended rate to the money you’ll save if you break your mortgage.