Why Do Homeowners Refinance?
There are many reasons to consider refinancing your mortgage. The right strategy depends on what you're trying to accomplish, the equity available in your home and whether the numbers make sense after considering the costs.
1. Consolidate Debt
Use available home equity to pay off higher-interest debts such as credit cards, lines of credit or loans and combine them into one payment.
2. Renovate Your Home
Access equity to help fund a renovation, addition or major home improvement without relying entirely on higher-interest forms of borrowing.
3. Access Home Equity
Your home's equity may provide access to funds for a major expense, opportunity or other financial goal.
4. Invest
Some homeowners explore using equity to fund an investment, purchase another property or pursue other opportunities. We'll help you understand the mortgage side so you can evaluate the overall decision with your financial and tax advisors where appropriate.
5. Restructure Your Mortgage
Changing your mortgage amount, amortization, payment or other features may help you better align your mortgage with your current financial situation.
Refinancing isn't automatically the right answer just because you have equity. We'll help you compar
How Much Equity Can You Access?
When refinancing, homeowners can generally borrow up to 80% of their home's current appraised value, subject to lender qualification and approval.
The amount you may actually be able to access depends on your home's value, your existing mortgage balance and any other loans secured against the property.
Example: A Home Worth $600,000
80% of $600,000 = $480,000
If your existing mortgage balance is $300,000, there could potentially be up to $180,000 of equity available through refinancing, subject to qualification, appraisal and other lender requirements.
$480,000 maximum financing
− $300,000 existing mortgage
= $180,000 potentially available
Having available equity doesn't necessarily mean you should use all of it. We'll help you determine how much you may be able to access and, more importantly, whether using that equity makes financial sense for what you're trying to accomplish.
Could Refinancing Help Consolidate Higher-Interest Debt?
Credit cards, lines of credit and personal loans can carry significantly higher interest rates than a mortgage. If you have sufficient equity in your home, refinancing may allow you to consolidate some of those debts into your mortgage.
This can potentially reduce the interest rate on the debt and simplify multiple payments into one. It may also improve monthly cash flow.
But a lower monthly payment doesn't always mean a lower overall cost. Extending short-term debt over a much longer mortgage amortization can increase the total interest you pay, so it's important to look at the complete picture.
It's About More Than the Monthly Payment
We'll compare your existing debts, interest costs, mortgage options and potential refinance costs to help determine whether consolidation makes sense — and how to structure it responsibly if it does.
Refinance Now or Wait Until Your Mortgage Renewal?
If your mortgage renewal is approaching, you may be wondering whether it makes sense to refinance now or wait until your current term ends. The answer depends on the reason you're refinancing, the costs of making a change today and how long you have left in your current term.
Refinance Before Renewal
Refinancing before your term ends may make sense if there's a financial reason to act now — such as consolidating high-interest debt, accessing funds for a renovation or making another important change to your finances.
The potential benefit needs to be weighed against any penalty and other costs associated with breaking your existing mortgage.
Wait Until Renewal
If your renewal date isn't far away, waiting may reduce or eliminate the prepayment penalty associated with breaking your current mortgage early.
That doesn't mean you should wait until the last minute. We can review the numbers in advance and help you develop a plan for renewal.
We'll compare the cost of acting now with the potential cost or benefit of waiting so you can make an informed decision.
Mortgage coming up for renewal? → Learn about your renewal options
Wondering If Refinancing Makes Sense?
You don't need to know exactly what you want to do before reaching out. Tell us what you're trying to accomplish and we'll help you understand the equity available, the potential costs and the mortgage options that may be available to you.