Source: Dominion Lending Centres
Refinancing your mortgage can be a smart financial decision, and as your trusted mortgage advisor, I’ve seen firsthand the benefits it can bring to homeowners!
Ideally, refinancing happens at the end of your mortgage term to avoid penalties, but the right timing can vary based on your goals.
For some, refinancing means tapping into home equity for renovations or covering significant expenses like college tuition. For others, it’s a chance to consolidate debt, lower their interest rates, or switch mortgage products.
Here are some key ways refinancing can help you:
Get a Better Rate: With recent decreases in interest rates from the Bank of Canada, now is an excellent time to consider refinancing for a better rate and lower overall mortgage payments. Experts predict that the overnight rate could drop to 2.75% next year.
Consolidate Debt: If you’re in renewal season, this is a great opportunity to review your existing debt. Consolidating it into your mortgage often results in a lower interest rate compared to credit cards or other loans. Plus, having one monthly payment can simplify your finances!
Unlock Your Home Equity: Have you been wanting to start home improvement projects or need funds for a major purchase like a new vehicle or college expenses? Renewing your mortgage is a perfect time to consider refinancing to access the equity you’ve built up.
Change Your Mortgage Product: If you’re dissatisfied with your current mortgage, now might be the time to switch. For instance, if you have a variable-rate mortgage, locking in at a lower fixed rate could be wise. Conversely, you might opt to transition from a fixed-rate to a variable-rate mortgage as rates are expected to decrease further into 2025. Refinancing also allows you to adjust your payment schedule for faster payoff.
Exciting Changes Ahead! Recent government updates will ease refinancing and renewal processes:
- As of November 21, those with uninsured mortgages will no longer need to pass the stress test, offering more flexibility in choosing rates and products when switching lenders without increasing your mortgage amount.
- Starting January 15, the federal government will allow default-insured mortgages to be refinanced for building a secondary suite. If you’re considering this option, you could access up to 90% of your home’s equity!
Whatever your situation, feel free to reach out for expert mortgage advice. I’m here to help!