Refinancing mortgages are a form of financing that helps homeowners pay off their previous mortgage in full by acquiring a new loan. This new mortgage can have a new set of terms as well as a different interest rate than the previous one.
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If you are facing difficulties with your current mortgage or trying to consolidate debt, a refinance mortgage is a good solution for you.
If you are wondering how to refinance your mortgage in Canada, here is everything you need to know to get started.
What is Mortgage Refinancing and why Should You Do It?
To refinance your mortgage you need to break your current loan and opt for a new mortgage with a lender of your choice. You can stick with your current lender if you want to. One downside of mortgage refinancing is the prepayment penalties borrowers face due to breaking their mortgages early on.
Refinancing a mortgage in Canada isn’t your only option. Sometimes other mortgages, such as a second mortgage or HELOC, can be a better solution for you. Some common reasons to refinance mortgages are:
1. Lower Interest Rates – Refinancing mortgages can often help borrowers with their interest rates. Depending on the prepayment penalty and the size of your outstanding mortgage, refinancing can save you a lot of money.
2. Tap Into Your Equity – You may be able to access the equity in your house by refinancing your mortgage. People can borrow up to 80% of their home’s appraised value. This money can be put aside to
Breaking your mortgage, taking up a home equity line of credit (HELOC), or mixing and extending your mortgage with your present lender are all options for borrowers tapping into their equity.
3. Refinancing Debt – Debt consolidation via refinanced mortgages is a common solution in Canada. If you have any outstanding obligations, such as credit card bills and small loans, you may be able to combine them using one of the many refinance mortgage solutions available.
If you can relate to these scenarios, you've come to the right place! With Freedom Capital, our borrowers receive custom-tailored commercial financing solutions and quick approvals.
Freedom Capital Team is one of the most amazing mortgage brokers that I have work with, the level of service they provide is outstanding. The team is very professional and were able to answer all of my client questions. Very responsive and acted fast on a mortgage that need it to get approved fast. Highly recommend working with Freedom Capital. Thanks Pip, Sylvia and Kathy
RSB Developments Ltd
Positive: Professionalism, Quality, Responsiveness, Value Pip and his dedicated team at Freedom Capital went above and beyond for us. We gave them a challenge of getting approval for us within 24 hrs and they were able to do it! I am so appreciative of Pip and his team for taking the time to not only help us understand the process but get it done Quickly! It was easy to see that Pip really values his clients and their best interests. We would work with Pip and his team in the future!
I am very happy to have worked with Pip, Sylvia, Rosy, Kathy on my recent mortgage fund. Especially Kathy and Rosy with constant follow-ups and conversations with me all along the application until funding date. Rosy has guided me through the process which I needed. I understand it must be a whole team effort, a lot of work must have occurred behind the phone line in which me the client might not be able to see after I hang up conversing over the phone. They have worked diligently to bring satisfaction serving their clients. I truly appreciate and grateful to deal with Freedom Capital!
I have worked with many private lenders in the past and I must say that Rosy Ram was the one of the best people to deal with. To top it off my situation was extremely difficult and had many layers to it. After submitting documents that Rosy required she was able to get me a deal quite quickly. I was pleasantly surprised how professional and efficiently she worked. Many other lenders will promise you deals, string you along only to fall short in the end. All the terms, conditions and rates were very reasonable in light of my situation as well. Looking forward to doing more business with Freedom Capital!
Pip Dhaliwal and The Freedom Capital Team are top producers in the mortgage game. Time after time they come forward effectively, efficiently with experience that counts and competitive results! As commercial developer we trust Pip and his team when they say they will get it done! They think outside the box and deal size never matters with Freedom Capital, they have knowledge and relationships with credible financiers to make our 106 unit condo project a reality and help Transnat Properties provide affordable homes to the public.
We had another broker working on our deal for over three months, and the service was very disappointing... Then we called Pip for a competitive assessment, he made the deal in less than 2 weeks, and it was 3 x what the other lenders were offering. We even got open terms and better interest rate than we expected. Fantastic service and A very reputable lender… We would never go to another broker again!! 5 STARS!!
Refinancing a Mortgage with Bad Credit in Canada
It can be hard to refinance your mortgage with a bad credit score. However, it is not impossible. Certain lenders in Canada offer mortgage solutions specifically for borrowers with bad credit. They offer reasonable requirements, swift application procedures and feasible income qualifications.
If you are looking to refinance a second mortgage with bad credit, Freedom Capital is a great mortgage brokerage for you. We can provide mortgage approvals in as little as 24 hours* with custom solutions tailored to your needs.
When refinancing a mortgage in Canada you may face:
- Mortgage registration fees
- If you switch to a new lender you will need to pay mortgage discharge fees
- Legal fees for a lawyer
- Appraisal fees
- Payment penalties for your mortgage, such as IRD.
Borrowers renew a mortgage to re-sign with their current lender. While renewing a mortgage, borrowers typically opt for the same mortgage terms and interest rate as their current mortgage. When you refinance a mortgage you break your current mortgage in favour of a new mortgage with different mortgage terms and interest rates. To make things simple; you renew a mortgage when you want to extend your current mortgage with the same lender but you refinance a mortgage when you are looking for new mortgage terms with a different lender.
To refinance mortgages with a home equity line of credit borrowers need to simply take out a HELOC and then get approved for mortgage refinancing from their lender. Whether or not you get approved for mortgage financing with a HELOC solely depends on your lender, income and credit.