Refinancing your mortgage can be an excellent decision for various reasons. As a mortgage advisor, I have witnessed the many benefits it can offer to homeowners.
Ideally, refinancing is done at the end of your mortgage term to avoid penalties. However, other times may also be appropriate depending on your financial goals. Some homeowners choose to leverage the equity in their home to finance renovations or major expenses, such as university tuition. Others prefer to consolidate debts, secure a better interest rate, or select a mortgage product better suited to their needs.
The Benefits of Mortgage Refinancing:
1. Secure a Better Rate:
With the continuous decline in interest rates following recent decisions by the Bank of Canada, refinancing now could allow you to secure a better rate and lower your monthly payments. Experts predict the benchmark rate may drop to 4.0% by the end of the year and potentially to 2.75% next year.
2. Consolidate Your Debts:
Refinancing is an opportunity to consolidate your debts into your mortgage. Mortgage rates are typically lower than credit card rates or other types of loans. By consolidating your debts, you simplify financial management and reduce overall costs.
3. Tap Into Your Home Equity:
Do you have renovation projects, a significant purchase, or tuition fees to cover? Refinancing allows you to access the equity you’ve built in your home to fund these projects.
4. Change Your Mortgage Product:
Does your current mortgage no longer meet your needs? You could switch from a variable rate to a fixed rate, or vice versa, depending on interest rate trends. Additionally, refinancing can provide the flexibility to adjust your payment schedule or amortization period, helping you pay off your mortgage faster.
New Advantages Coming Soon:
• Starting November 21: If you have an uninsured mortgage, you will no longer be required to pass the stress test. This makes it easier to choose a new product or better rate, especially if you want to switch lenders without adding funds to your mortgage.
• Starting January 15: Insured mortgages can be refinanced to add an accessory dwelling to your property. You could access up to 90% of your home’s equity to finance this addition.
Need Support?
Whatever your situation or plans, I am here to provide personalized advice. Feel free to contact me to explore all your options and maximize the benefits of your mortgage refinancing!
