In a market where rates are seeming to be at an “all time low”, we are seeing clients ask regularly, “Should I refinance?” Refinancing your current mortgage term can make sense for many reasons, debt consolidation, to access funds from equity, secure a lower interest rate, or to lock in a low interest rate for simple peace of mind.

Often times we suggest that clients who have accounts which are higher interest than their current mortgage term, and that they don’t have the ability, or plan to pay down in full within the next year or two, that it would make sense to consolidate that account with their current mortgage. This will allow the client to save monthly and increase their current cash flow. In most cases, the client will have much lower monthly payments by wrapping both payments in together. To ensure the principle of the consolidated account is getting paid down in good time, we are able to increase the monthly mortgage payment in most cases by up to 20%, which means you will be able to pay these accounts off years faster than by paying the high interest, or interest only payments – great news!

Another option for refinancing would be to access some of your equity. Your property, your equity, and your funds to access if you desire! In Canada, consumers are allowed to refinance at up to 80% of the market value of their property. Any of that percentage above and beyond what your current mortgage balance is, can be simply deposited into your account at mortgage completion as used as you wish. Many of our clients will secure a refinance in order to fund renovations, purchase a vehicle, use for the down payment of another property purchase, or for other investment purposes.

With rates being so attractive, sometimes it might make sense for clients to simply break their current term to secure a new lower interest. Often times we see the interest savings over the remainder of their term outweighing the penalty cost, and giving them peace of mind knowing they have such a low interest rate secured for another 5 year term.

Ensure to review all options with your mortgage broker to make sure refinancing is the best option for your future goals. Mortgage properly!