Question 1

How much equity can I access when I refinance?

Accepted Answer

Up to 80% of your home's appraised value, less your existing mortgage balance. So a $900K home with a $400K mortgage typically allows up to $320K of accessible equity, before legal and penalty costs.

Question 2

What's the typical break penalty on a refinance?

Accepted Answer

Variable-rate mortgages: 3 months' interest. Fixed-rate mortgages: greater of 3 months' interest or the IRD. Big-Five fixed-rate IRDs can be substantial — we run the math before recommending a break.

Question 3

How fast does a refinance close?

Accepted Answer

Standard prime-lender refinances close in 2–3 weeks. Alternative lender refinances usually run 7–14 days. Private refinances can close in 5–10 days for clean equity-based files.

Question 4

Will refinancing hurt my credit?

Accepted Answer

Briefly — the credit pull and mortgage replacement appear on your report. Within 90 days the dip typically reverses. Refinancing with the same lender often avoids a hard pull entirely.

Question 5

Can I refinance with bad credit?

Accepted Answer

Yes. Alternative and private lenders underwrite on equity first, credit second. Rates are higher but the file often self-corrects: consolidate the debt, rebuild credit for 12–24 months, then move back to A-lender pricing.

Question 6

Should I refinance to consolidate debt?

Accepted Answer

Almost always — if the math works. Replacing 20%+ credit-card interest with sub-8% mortgage interest typically frees $500–$2,000/month of cash flow. The trade-off is amortizing that debt over 25–30 years, so pay down aggressively once cash flow improves.

Question 7

Can I refinance and take cash out for renovations?

Accepted Answer

Yes. Cash-out refinance is one of the most common uses. Renovation dollars pulled from your mortgage cost 5–7% instead of 12–20% on an unsecured line — and often increase the property's value.

Question 8

Is it better to refinance or take a second mortgage?

Accepted Answer

If your first-mortgage rate is materially better than today's rates, a second mortgage lets you access equity without touching the first. If today's rates are similar or lower, a full refinance is usually cheaper long-term.

Question 9

How often can I refinance?

Accepted Answer

As often as it makes financial sense. Most homeowners refinance every 3–5 years at renewal or when equity has grown enough to consolidate debt again.

Question 10

Do I need an appraisal to refinance?

Accepted Answer

Almost always for refinances above 65% LTV. Alternative and private lenders always require one. Cost: $350–$550 for standard residential.

Question 11

Can self-employed borrowers refinance?

Accepted Answer

Yes — same lender mix as any refinance. B-lenders and select A-lenders offer stated-income and bank-statement programs for self-employed refinances.

Question 12

What documents do I need for a refinance?

Accepted Answer

Two years of income (T4s or NOAs), current mortgage statement, property tax bill, ID, and 3 months of bank statements. Self-employed borrowers add T1 generals or 12 months of business banking.

Question 13

When does a refinance actually save me money?

Accepted Answer

When the total interest saved plus cash-flow relief exceeds the break penalty and closing costs over the remaining term. On a $500K mortgage with a 1% rate improvement, break-even is typically 12–18 months.

Question 14

What's a blend-and-extend and is it cheaper than breaking?

Accepted Answer

Your current lender averages your existing rate with today's rate over a new term, avoiding a break penalty. Big-Five blend math is often unfavourable; a full break with a new lender frequently wins net-of-penalty.

Question 15

Can I refinance to buy an investment property?

Accepted Answer

Yes — pull equity out of your primary residence to fund the down payment on a rental. The interest on the portion used for investment is tax-deductible.

Question 16

How do I calculate my home's current value?

Accepted Answer

Look at 3 recent comparable sales within 500m in the last 90 days. A formal appraisal ($350–$550) is required for lender approval above 65% LTV.

Question 17

Should I refinance now or wait for lower rates?

Accepted Answer

If refinancing solves a cash-flow problem or funds a specific need (debt consolidation, renovation), don't wait. If it's purely rate-motivated, model the break-even against expected rate movement.

Question 18

Can I refinance and take a longer amortization?

Accepted Answer

Yes — up to 30 years on uninsured refinances, or 35 years at select alternative lenders. Longer amortization reduces monthly payment but increases total interest.

Question 19

Does refinancing restart my mortgage from scratch?

Accepted Answer

Effectively, yes — new term, new amortization, new rate. Your equity position is unchanged; only the debt structure resets.

Question 20

Can I refinance a rental property?

Accepted Answer

Yes. Rental refinances typically cap at 80% LTV and require rental income documentation (leases or T776 statements). Rates are 0.10–0.30% above owner-occupied.

	Refinance	HELOC	Second Mortgage
Best when	Rates improved or major restructure	Ongoing access to funds	First-mortgage rate is too good to break
Access	Lump sum	Revolving	Lump sum
Rate	Lowest	Prime + 0.5–1.0%	Prime + 2–4% or 8–14% private
Break penalty on first?	Yes	No	No
Setup cost	Legal + appraisal	Legal + appraisal	Legal + appraisal + broker/lender fees

Mortgage Refinance

Get Pre-Qualified

Who a mortgage refinance is — and isn't — for

Myths vs. reality

Refinance vs. HELOC vs. Second Mortgage

What working together looks like

Net-benefit review

Appraisal & document collection

Lender selection

Approval & lawyer instruction

Funding

Common questions

Mortgage Refinance across Ontario

From the Learning Centre

Reverse Mortgages in Canada

Jay Klair

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