Refinance

Mortgage Refinance Guide

We have created a mortgage refinance guide to help you navigate the process and avoid the common mistakes people often make.

Refinancing your mortgage allows you to borrow against the equity in your home for purposes such as renovations, investments, debt consolidation, and more. You are allowed to refinance at any point during your term, although there are different costs associated with it at different times.

Before You Get Started

It’s important to have a clear picture of how much money you require before you begin the refinancing process. Depending on the purpose of the additional funds, you may require a little or a lot, so having a professional and accurate estimate on potential renovations or investments can be very helpful.

When applying to refinance, you’ll require an appraisal on your home. Banks will lend you a maximum of 80% of the appraised value, so when you subtract the amount owing on your mortgage from that 80%, you can roughly determine how much you are eligible to receive.

The application process is the same as when you initially secured your mortgage. Lenders will consider your income, debts, and credit rating in conjunction with the property value when determining how much money they’re willing to give you.

If you refinance mid-term you may be faced with a discharge penalty, which is not the case once your mortgage has matured.

In the case of a mid-term application – and depending on the type of mortgage and rate – you’ll need to decide between blending your current rate, adding a mortgage component, or taking on a whole new mortgage. Factors such as potential discharge penalties, your remaining term and prevailing market rates will all affect your decision. It’s a straightforward financial calculation that we are happy to help you with.

Steps

Steps to Renewing

We have outlined the key steps to refinancing your mortgage to ensure you make the best financial decisions.

Step One

Refinancing at the Right Time

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You can refinance at any time during your term or when your mortgage matures, but it’s important to understand the benefits and costs of doing so.

In some cases, it may make sense to break your mortgage to access a better interest rate if the penalty is lower than the cost of breaking the term. Conversely, if you can’t make the penalty back, increasing your existing mortgage (we call this “blending”), could be a better option.

When you refinance a mortgage, you start paying interest immediately. If you want to access the money right away, then you’ll typically find this acceptable. But, if you don’t need it right away, you may want to consider options with components, such as a re-advanceable mortgage.

Once your mortgage has reached maturity, there are no penalties.

There are a number of reasons why people choose to refinance their mortgages, but here are some common examples:

  • Debt Consolidation
  • Investments (stocks, bonds, mutual funds, RRSPs, etc.)
  • Renovations
  • Property Investment
  • Provide Family Member with a Down Payment
  • Purchase a Vehicle

Assuming you qualify for this extra amount of money, the maximum you can borrow is 80% of the appraised value of your property, which you can determine through an assessment.

Quick Apply

Step Two

Pick Your Rate and Term

By having a clear idea of your personal and financial goals, you’ll be better able to select the type of interest rate and term you want. We can walk you through the process and answer any questions you may have.

Step Three

Apply For Refinancing

Refinancing applications are very straightforward as long as your paperwork is in order. You’ll need to update your mortgage profile to provide current information, such as your employment and income information, debt and credit status, and current property value. We can help you by outlining everything that is required.

When you apply online, you’ll receive an immediate response that includes a list of required documents based on your profile.

FAQ

Frequently Asked Questions

We have compiled a list of the most common questions you may have during the process of refinancing your mortgage.

Who is Spin Mortgage?

We’re an online mortgage brokerage with licensing offices in British Columbia, Alberta and Ontario and have been operating since 1998. We handle one of the largest annual per-broker volumes in Canada through our online platform, which we have invested in heavily to deliver a mortgage process that is intuitive and easy to operate. We provide clients with the freedom they need to access mortgages on their terms.

How do I Apply?

We’ve created a quick apply form that can typically be filled out in about five to ten minutes. If you don’t have all your information handy, no problem. Our applications have a “save for later” option that allows you to start off from where you finished without having to begin again.