Refinancing can create accessible cash out of your home’s equity. This means you can tap into your home’s equity and use that money in a few different ways.
Consolidate Debt
Some folks refinance their mortgage so that they may consolidate their debts. By consolidating you move your various debts owing (credit card, vehicle, etc) into one singular more manageable payment. While consolidating does not remove the obligation to the debts owed, it will drastically change the amount of interest paid on to the debt. Most Credit Cards have an average interest rate of 20%, so while consumers are still paying off their debt, they will save on the interest they would have otherwise been charged.
Investing in Property
If you’re considering an investment property or vacation home, you could use the equity in your first home to finance your second. By using your home’s equity it could free up money to act as a downpayment for another purchase.
Our Ottawa mortgage experts are here to help you refinance your mortgage and use this low-cost method of borrowing to:
- Access lower interest rates.
- Switch to a fixed or variable rate mortgage.
- Renovate your home.
- Invest in a new property.
- Invest in the stock market.
- Make a big purchase.
- Consolidate debt or increase loan amortization.
- Manage a financial emergency such as a death or sudden illness
When deciding to refinance your home, there are some important factors to consider. Refinancing can cost you between 2% and 5% of the land’s principle and, just as your original mortgage did, it requires an appraisal, a title search and application fees. We recommend speaking with The Woollam Mortgage Team about your specific situation to determine the viability of refinancing your mortgage based on your specific circumstance.
Refinancing can be beneficial when interest rates are lower than your existing rate, your credit has improved, or you have a specific financial goal like accessing equity or consolidating debt. It’s not just about rates — it’s about what that rate allows you to do with your money. If refinancing reduces your costs or makes your financial life easier, it’s worth considering.
Equity is generally calculated as the difference between your home’s current value and the balance on your mortgage. Many lenders look for at least 20% equity to offer competitive terms, though some products allow lower equity with alternative qualification criteria. We’ll help you determine what equity you have and which options are available to you.
It can — but it doesn’t always have to. Some homeowners choose to extend the amortization to lower monthly payments, while others maintain or shorten it to pay off the mortgage faster. Your goals whether it’s lower payment today or less interest long term determine the recommended structure.
Yes. Depending on your lender and situation, there may be legal fees, appraisal fees, discharge fees from your current mortgage, or early payout penalties. We review all potential costs up front so you know exactly what to expect and can assess the value of refinancing with full transparency.
