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Refinancing my mortgage in Ontario

Key Takeaways

  • Mortgage refinancing means that a new mortgage will pay out the old mortgage
  • There is room for renegotiation of amortization, interest rates, payment frequency
  • Borrowers can access the equity in their home for debt consolidation, home renovations or home equity loans
  • It is important to assess the costs and fees to ensure refinancing makes financial sense

If you are looking to refinance your home in Ontario, it is important to understand the possibilities to access more equity in your home or take advantage of new terms. A mortgage refinance is a new mortgage on your home that pays out the existing mortgage. You may have the option to blend the interest rates, extend the term of the loan, and have other options without a penalty if you stay with the same lender. If you move to another lender, there may be penalties, but the benefits over time may outweigh the penalties.

With a new mortgage, you will be able to renegotiate:

  • The mortgage term (length of mortgage)
  • The mortgage rate
  • Payment frequency – monthly, bi-weekly, weekly
  • Total mortgage amounts

Refinancing a mortgage is a powerful option for Ontarian homeowners, like yourself, when there is an opportunity, such as interest rates going down or if you need to consolidate your debt. As long as you have at least 20% of equity built up in your home, you are able to qualify for refinancing. If you change the payment frequency to increase the number of payments, reduce the mortgage term or amortization, and negotiate for a lower mortgage rate, you can shave years off a mortgage and save thousands over the life of the loan.

Refinancing my mortgage in Ontario

Renewing vs. Refinancing


When your mortgage term finishes, which is usually in three to five years, then the natural renewal period occurs and you can re-sign your agreement with your current lender generally for similar terms and conditions. A renewal can be seen as a continuation in paying down the original mortgage with a new interest rate, shorter amortization period and perhaps a different term or payment structure.


A new mortgage is created to take the place of the old one, with new interest rates, terms of payment, payment frequency, and any other terms related to the loan. This can be done at any time during your mortgage and will incur penalties, unless your lender provides the opportunity to “blend and extend” where you can adjust the terms of the mortgage at a blended interest rate.

Why refinance a mortgage?

While it may seem complicated at first, this process can really benefit your financial wellbeing and long term financial goals. Lower monthly payments, less interest, and access to home equity are all strong reasons to look into refinancing.

People refinance their mortgages to

  • Improve their cash flow
  • Renovate their home
  • Consolidate their debt
  • Save on interest costs

Better financial management

If you locked in your mortgage at a higher interest rate, many experts agree that a rate that is lower by 1-2% is enough reason to refinance. Regardless, it is important to take an honest look at your finances to determine what the best way to handle your debt is. If you are managing multiple loan payments, keeping up with confusing payment loan schedules, or wanting to do a home renovation, a mortgage refinance is a good option.

Refinancing Pros Refinancing Cons
Lower interest rates Mortgage prepayment penalties
Debt consolidation Legal fees
Access home equity Appraisal fees
Change in variable or fixed rate Mortgage discharge fees
Change in payment frequency Mortgage registration fees
Change in mortgage amortization or term Getting qualified

Be sure to take a close look at the fees in Ontario, as there are costs associated with refinancing the mortgage in the middle or the end of the term.

It’s also important to remember that you will need to apply for a new mortgage. This means that the lender will be looking at your finances to ensure you can afford the monthly payments. Your debt-to-income ratio and credit score will be investigated again. Working with a mortgage expert at Mortgage Maestro will help you to navigate through these issues and get the best mortgage rate.

How to refinance a mortgage

Ontario offers different ways to refinance a mortgage, and each can be considered an option when you are thinking about getting an agreement.

Breaking the mortgage contract

If the interest rates are 1-2% lower, or you want to access your home equity for home renovations or to consolidate your debt, this is an option. You will get a new mortgage to pay off the existing one, but this can be done with any lender. Usually it incurs a pre-payment penalty from the bank plus other fees, so the savings have to be worthwhile.

Home equity line of credit (HELOC)

This term refers to a secured loan that uses the value of your home minus the current mortgage value as collateral. When you take money out on a HELOC, you pay interest-only payments on the balance owing. This is a powerful method for debt consolidation, but it takes the discipline of paying it off, since you make interest-only payments.

Blend and extend

Sometimes, a lender will approach you near the end of the mortgage term and offer to give you a blended interest rate if you extend the mortgage. You can add additional borrowing to the mortgage and may be able to adjust payment terms and amortization. These rates are usually higher than the more competitive ones, but sometimes it pays to take advantage of lower interest if there is inflation and the rates are going up.

By talking to a mortgage professional, you can find the best option to fit your financial needs.

Refinancing: The Mortgage Maestro advantage

Our team of mortgage experts can guide you through the process of refinancing your mortgage. We will assess your current situation and financial goals while offering unbiased advice to ensure you find the best option for your needs. Our competitive rates are available from dozens of lenders, and based on years of experience, we can guide you to get the best custom mortgage product for your particular financial situation. If your mortgage is renewing soon, contact us today to get the review process started.

Is a mortgage refinance right for you? Click on the below Apply now button or call us at 888-503-0505 to connect with our mortgage experts and find the best solution for you. It may be a good time for a mortgage refinance, and it could save you thousands of dollars.

Further reading