Refinancing
Put Your Home Equity to Work
Consolidate expensive debt, fund a renovation, or restructure your mortgage — with the penalty math done honestly, before you commit.
How refinancing works
A refinance replaces your current mortgage with a new, usually larger one — up to 80% of your home's appraised value. The difference between the new mortgage and the old balance is paid to you as tax-free cash. In a market like the North Shore, where values have compounded for decades, homeowners often have far more accessible equity than they realize.
The three most common reasons to refinance
Debt consolidation
Move 20%+ credit card debt to mortgage rates. One payment, dramatically less interest, immediate cash-flow relief.
Renovations
Fund a suite, laneway home, or major upgrade at secured rates — often the cheapest capital available, and a rental suite can add qualifying income.
Investment
Unlock a down payment for a rental property or investment portfolio, structured so interest may be tax-deductible (confirm with your accountant).
The honest part: penalties and break-even
Breaking a mortgage mid-term costs three months' interest on a variable, or the greater of that and the Interest Rate Differential on a fixed — and IRD can run five figures. A refinance only makes sense when the savings or the value of the capital beats the all-in cost of penalty, legal, and appraisal fees. That's the first calculation we run, and if the answer is "wait for your renewal," that's what we'll tell you. Renewing soon instead? See our renewal guide.
Refinance vs. HELOC
Need a lump sum at the lowest rate? Refinance. Want a standby credit line you can draw and repay as projects come up? A HELOC (up to 65% of home value) keeps interest costs at zero until you actually borrow. Many of our clients use a readvanceable mortgage that combines both — the fixed portion shrinks while the available line grows. Model payments with our mortgage calculators.
Refinancing FAQs
How much equity can I access when refinancing?
You can refinance up to 80% of your home's appraised value, minus what you still owe. On a $1,200,000 home with a $500,000 mortgage, that's up to $460,000 of accessible equity. A HELOC portion can revolve up to 65% of value within that 80% limit.
What penalty will I pay to break my mortgage early?
Variable-rate mortgages typically charge three months' interest. Fixed-rate mortgages charge the greater of three months' interest or the Interest Rate Differential (IRD), which can be substantial when your contract rate is above current rates. We calculate your exact penalty first and include it in the break-even math — sometimes rolling it into the new mortgage still saves money, sometimes waiting for renewal wins.
Does refinancing to consolidate debt actually save money?
Usually the arithmetic is dramatic: credit cards run 20%+ and unsecured lines 9-12%, versus mortgage rates in the 4-5% range. Consolidating $50,000 of card debt into a mortgage can cut interest costs by thousands per year — provided the freed-up cash flow doesn't rebuild the card balances.
Do I need to requalify under the stress test to refinance?
Yes. Unlike a straight renewal switch, a refinance (new money or longer amortization) requires full requalification at the greater of your contract rate plus 2% or 5.25%, within 39% GDS and 44% TDS limits.
What is a HELOC and how is it different from refinancing?
A Home Equity Line of Credit is revolving credit secured by your home — borrow, repay, and re-borrow up to 65% of home value. A refinance replaces your mortgage with a larger one at a fixed or variable rate. Many lenders offer combined ("readvanceable") products with both; the right structure depends on whether you need a lump sum or ongoing access.
