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Refinance Mortgage Toronto

Mortgage refinancing pays the current mortgage or other credits or debts against your property and creates a new mortgage. There is transferring, renewing, and porting involved in the process among other things. There are times when it makes financial sense to refinance your mortgage on your Toronto home. A refinancing occurs when you take out a new mortgage on your property with a whole new set of terms and conditions, and at a new interest rate. This may be an alternative to taking a more expensive second mortgage to cover expenses such an education or renovation of your home. Under some circumstances, it can be cheaper to opt out of your current mortgage and renegotiate a mortgage at terms and rates that suit your current circumstances.

Why Do People Refinance Their Mortgages?

  • To take advantage of lower interest rates. A small rate reduction can have a huge impact on what you pay over the term of the mortgage.However, before mortgage refinancing, you must pay attention to the prepayment penalty and the amount of money you still owe on the mortgage because they determine the interest. Mortgages that have variable interest rates attract a three-month interest as a penalty. Applicants with fixed-rate mortgages must pay whatever is higher between the interest rate differential penalty (IRD) and the three-month interest. Even so, the prepayment penalties do not mean refinancing your mortgage is a bad idea. You can still calculate the numbers to find out whether refinancing is beneficial or not. Your mortgage broker can help you make an informed decision.
  • To obtain access to home equity. You can use up to 85% of the equity in your home to finance renovations, pay for education or consolidate high-interest debt. Equity in your home is the current market value of your home less the unpaid balance of mortgages against it. Interest rates on loans covered by home equity are a lot lower and these loans can be used to consolidate more expensive debts. If the equity in your home is less than 20% this is not a feasible option.

Refinancing Options

  • Early closure of the current mortgage
  • Add a home equity line of credit HELOC – This revolving credit option allows you to take out as much as 65% of the equity in your home. You use what you need and pay interest only on the amount that you have borrowed. You can pay back and borrow from the HELOC as required
  • Blend and extend – Sometimes called early renewal. It blends current rates with existing rates and is then extended back to the fixed term of the mortgage
  • Change the amortization period in accordance with current financial realities. For example, shortening your amortization period can save you thousands of dollars over time or you may wish to extend the period to reduce the monthly payments.

Some Of The Main Reasons To Refinance Your Mortgage

Proper Refinance Provides You With An Additional Fund Of Money

Mortgage refinancing pays the current mortgage or other credits or debts against your property and creates a new mortgage. There is transferring, renewing, and porting involved in the process among other things. Refinancing the mortgage is a good option for many different situations and people. Typically if refinancing is done properly, it provides you with an additional fund of money.

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When Should You Consider Refinancing Your Mortgage?


  • Refinancing your mortgage for home renovation.
    Major home improvement projects are expensive, with store credit cards for them having very high-interest rates. However, you can secure a better rate if you use the equity on the commercial or domestic property you own to pay for your home's renovation, rather than deposit all the charges on a personal or store credit card.
    Most people choose to refinance with home renovations in mind. The equity or refinancing loan can help you achieve more by providing the money you need to pay for the renovation's labour costs. In addition, it is a better option considering the lower interest rates usually offered with such loans – they are better than the rates available on renovation store cards.
    Planning adequately before starting a renovation is still essential, even if you have a loan from mortgage refinancing. That begins with choosing an appropriate time to start the project and applying for the refinancing at least a month earlier. When dealing with a traditional lender, beginning at least four weeks before the job is crucial. Alternative or private lenders will require at least one week to process your application, especially those dealing with mortgages. Early submission of applications also prevents you from paying higher interest and fees.
    If traditional mortgage lenders like banks turn you down, you can always turn to a private or Blender. The waiting period will differ depending on the private lender you choose. Some can complete the processing within 48 hours, and others may take longer. Remember, alternative lenders charge higher mortgage rates than traditional lenders. Therefore, they should be used as a temporary solution with shorter loan terms or as a last resort. Always refinance the mortgage with your bank. If banks turn you down, get a one-year or a maximum two-year mortgage term when borrowing from an alternative mortgage lender.

  • Divorce or separation.
    Divorce or separation is a delicate process everywhere, with the main contention being asset separation. Handling finances in such situations is usually challenging regardless of whether it involves separation from a business partner, common-law partner, husband, or wife. One of the best options for an amicable property division is using mortgage refinancing. You can achieve that by drawing from the available equity through the mortgage refinance, then using that money to buy out your partner. That means the property in question will be solely yours, but you can also look for a different co-owner to replace the previous one. Remember, the amount of equity available determines whether this works or not.


  • Refinancing your mortgage for debt consolidation.

    Sometimes different types of debts become too strenuous to handle. For example, you may have credit card loans and other personal debts that you cannot clear at once.
    You can consolidate the payments on your high-interest loans into one lower payment made every month through an equity loan on your available home equity. This is called debt consolidation. In addition, the new arrangement can help you create an ideal budget for your lifestyle, making it easier to manage your cash flow.
    Most people with poor credit scores in Canada can attest to having bad debts with higher repayment requirements. Debt consolidation allows borrowers to combine all the loans with high interests, bills, and overdue credit card accounts and pay for them in lower monthly payments, which is very helpful during retirement or times of financial hardships. As well, it keeps you from accumulating more debt.
    You do not have to wait until you go bankrupt before withdrawing money from your available home equity to start settling those debts. Instead, start the mortgage refinancing process as soon as you notice the bills are becoming too much to handle or when your cash flow starts running low. You may have some money left over every month-end that you can use to quickly clear the unsettled principal balance of what you owe because mortgage rates are typically lower than other credit sources.
    Mortgage refinancing for debt consolidation can also help with credit repair. However, the effectiveness differs with every person according to the situation and the lender. In most cases, borrowers have to close some accounts associated with the debts.
    The only way to improve a poor credit score is by making sure the outstanding balance on credit cards reduces significantly. It will show you are more responsible with the money you borrow and are worth trusting. Most lenders look for good borrowers and will be willing to give you a chance when you need a new mortgage or refinancing. That means you must compare your credit limit with the remaining balance on the credit cards. More debt means lower chances of improving your credit history or score. When the mortgage refinance lender sends the money directly into your account, use it to settle as many debts as possible. A good score will impress more lenders, allowing you to access any mortgage you want whenever you need it at lower interest rates. Work with a mortgage broker to find ways of reducing the debts as you explore other ways of increasing your credit score.



  • Pay off a student loan.

    The constantly increasing cost of tertiary education leaves many people searching for loans to pay for their studies. Parents who own their homes can turn to mortgage refinancing to cater to their children's higher education. You can get a loan to pay for the studies, then use the money from refinancing the house to offset the higher interest debts. You will have more affordable lower interest rates.


  • Mortgage refinancing in order to invest.
    Not every homeowner chooses to refinance their mortgage in order to invest in properties. Instead, some do it to explore other investment options, such as private mortgage investing. Since mortgage refinancing loans have lower interest rates, you can lend the money to people looking for private mortgages at a higher interest and make great returns. This type of investment is formally known as financial leveraging. The banking industry is built on that concept, and most bankers are building their careers on the same. Financial leveraging means borrowing money at a lower interest and lending it at a higher one. Below is an example based on available home equity.
    Assume you can refinance the mortgage at $120,000 with a 2.75% fixed rate interest and a five-year term. The interest rate is not variable. If you can invest the same amount at a higher interest of 10%, you get to make a profit worth 7.25%.
    A home equity line of credit can also be a mortgage refinancing alternative. The credit line is a loan that uses the property as collateral. It has a higher interest rate than the mortgage, but it’s revolving. One of the advantages of using a HELOC is that it is usable and payable any time regardless of the interest accrued. Below is an example of how you can leverage the credit line.
    If you get a loan amounting to $110,000 with an interest of 3.75%, you can invest the amount and ask for a higher interest of about 12%. Your profit will be the difference in the rates, which is 8.25%.
    It is important to note that the interest rates for HELOC loans are usually variable. That means they can differ with the mortgage rates. Therefore, you must consider all the factors attached when calculating them to understand the refinancing amount you might get. Certified Mortgage Brokers can give you all the relevant information you need and help you compute the numbers in order to choose the best mortgage options. Remember, not all mortgages can serve your objectives. Compare them and select the one that is likely to give you the benefits you want.


  • You need money for a down payment.
    Real estate is one of the most enticing industries for upcoming investors. However, coming up with enough money for such ventures is a big challenge for most people. In most cases, savings alone are not enough. The high property prices in many regions including, Oakville, Mississauga, Ottawa, and others, means you must come up with other sources of financing to buy the property you want. With mortgage refinancing, high property costs do not have to be a limiting factor. It is a perfect alternative considering the few financing options available for investors.
    The stringent policies and regulations that traditional lenders must adhere to make it harder for most people to acquire the loans they need. The chances of getting financial assistance from your bank are very minimal. The situation forces most borrowers to turn to alternative lenders who charge exorbitant fees. Mortgage refinancing can help you avoid that and still achieve your dream by helping you get into the real estate sector.
    Most Canadians are discovering the benefits of mortgage refinancing in the real estate investment industry. They use the money from mortgage refinancing to purchase other homes or at least make the down payment. It works for domestic, commercial, or income properties.

  • Mortgage refinancing for retirement.
    Homeowners who have reached their retirement age can also take advantage of reverse mortgages using their properties. You can access part of the available equity in cash. Use the money to pay some existing debts or for other personal uses. The best part is that you do not have to keep up with monthly payments so long as you retain ownership and live in that same house. It is a convenient way of improving your financial situation after retirement - more so when experiencing cash flow problems.

  • Cashflow management.
    Unexpected occurrences such as a job loss or medical emergency may make it difficult to manage your cash flow. Sometimes the rising cost of living can also impose further restrictions on how you control your income, especially if it is low. In most cases, the impact caused by such situations lasts longer than anticipated, meaning prolonged financial struggle. It is worse when the circumstances change without any countermeasures in place. It may also be worse when you do not have a stable income source, such as during retirement.
    If you are dealing with financial constraints that make it impossible to manage your cash flow, take advantage of your property value by refinancing your mortgage. The money can help you regain a good balance as you continue working on other money-making methods to provide a more permanent solution. Remember, refinancing is only a temporary solution and should not be perceived as a permanent income generation technique.
    If you need help, Certified Mortgage Brokers can give you an experienced and knowledgeable broker to help you out. We will tackle all the essential factors, such as your eligibility for mortgage refinancing, the amount you might qualify for, and help you find the most suitable lender that will give you the best rates.

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Difference Between Mortgage Refinancing and Mortgage Renewing

Most people use the terms mortgage renewal and refinancing interchangeably, but they have distinctive meanings. Renewal is when you get another mortgage with different rates from the same lender. You can agree to the same terms and rates or negotiate for better loan conditions. In most cases, the mortgage terms remain the same, with most lenders only allowing interest rates negotiation.

On the other hand, mortgage refinancing involves breaking the existing terms - you get a new loan with new conditions. You get to decide whether you want to remain with the same lender or work with a different one. There is no specific time for a mortgage refinancing. You can start the application process during the current term or when a renewal is due. Sometimes lenders can allow blend-and-extend mortgages. It means refinancing the mortgage before the mortgage term for the initial one elapses. You choose what you want to change and pay the fees attached to them.

Mortgage Refinancing in Toronto: Pros and Cons

Advantages of Mortgage Refinancing



  • ✔ Mortgage refinancing provides additional funds for big home renovation projects. You can borrow up to 80% of the equity to pay for the new improvements even without default insurance.


  • ✔ You can also save money through the lower interest rates associated with mortgage refinancing. You get to make smaller payments for a longer duration, reducing the financial burden you could be facing.


  • ✔ Refinancing a mortgage creates room for lower amortization and interest rates. You can clear the loan quickly without being overwhelmed by the higher expenses or multiple loans.


  • ✔ Mortgage refinancing that comes with a longer amortization enables you to have a better repayment plan. You can make smaller payments every month and manage your cash flow properly.


  • ✔ Consolidating several debts and using money from mortgage refinancing to settle them is another benefit. Instead of multiple payments, you can focus on one with favourable rates.

Disadvantages of Mortgage Refinancing



  • ✔ Penalties and other expenses associated with refinancing a mortgage can be too much to handle.


  • ✔ Processing the application takes approximately two to three weeks, which may be too long if you have an emergency.


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Refinancing Your Mortgage in Steps

1. You Need to Break Your Mortgage Early


Breaking a mortgage before the term makes sense if you need to use the equity on the house or take advantage of lower interest rates. It means doing away with the current mortgage and taking a new one with any lender you prefer.
It is important to note that breaking a mortgage early comes with penalties from the lender, especially traditional lenders like banks. In most cases, it is worth three months of interest. Therefore, you should only consider it if the new mortgage rates will be lower than the prepayment penalty you incur. That is the only way you will benefit.


2. You Need To Add a Home Equity Line of Credit


A HELOC or Home Equity Line of Credit allows you to access funds from the available equity of your property when you need to. It is similar to a credit card account, with the main difference being that a HELOC is secured. That is why the interest rates are lower.
Although it has many benefits, failure to keep up with the credit payments can affect your finances negatively. Show your responsibility by keeping up with the interest-only payments every month. Your current lender can give the line of credit, but you can also choose a different lender that deals with that mortgage type.

3. You Need to Blend and Extend You’re the Existing Mortgage


Some mortgage lenders allow the combination of current mortgages with new ones to form blended rates. It means adding the current mortgage rates with the latest market rates on the new loan you borrow. Blend and extend rates are usually higher than other mortgage types. However, it is good practice to compare offers from different lenders. You must also weigh them against possible profits you might get if you break your mortgage to ensure you do not spend more money instead of saving.

Mortgage on Your Toronto Home

You must compare the penalty costs of breaking the contract with the benefits obtained by so doing. The penalties on a variable rate mortgage are three months interest and on a fixed term mortgage it will be three months’ interest or the interest rate differential whichever is higher. The interest differential is more often than not the higher of the two. It is the difference between the current rate and the posted rate at the time of the mortgage.
Don’t let penalties put you off.
The consultants at Certified Mortgage Brokers Toronto can help you to calculate the savings and costs of changing. A change could save you a fortune.

Working With Us Means

We Will Take Care Of Following:


  • Legal Fees
  • Appraisal
  • CMHC/GE Capital Premium
  • PST
  • Title Insurance
  • Discharge Penalties

We Won’t Let You Pay Fees That You Can Avoid

There are both pros and cons of refinancing and costs related to the process. By working with us you will become familiar with all the information and feel good about making a decision. At Certified Mortgage Brokers you will not be tricked into paying fees that you can avoid.

We Create A Unique Plan That Reflects Your Conditions

We provide a vast variety of financing options so don’t hesitate to speak with us. Our expert staff will create a unique plan that reflects your situation. Let us know what you are interested in and we will make it happen.

Google Reviews

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Afton Jaskolski
2020-12-30

Getting a private mortgage was not easy to be honest, but at least with Mr. Leon it was doable. Thank you for your help!

Davin Mills
2020-12-26

There are a lot of mortgage brokers in toronto to choose from, I was a bit intimidated by that. Don't regret I picked CMB, they took the lead and made sure to cover all the bases

Tracy Wilhoite
2020-11-21

I was renting an apartment for a long time and finally decided to take a big step - get a mortgage instead. Team at certified Mortgage Brokers laid out various options for me. The actual process went smooth and quick, happy with my new home.

Ryder Turcotte
2020-11-16

My wife and I decided to refinance our mortgage and started looking for a mortgage broker in Toronto. There were so many options, so you can imagine how overwhelmed we got! After talking to Leon we decided to proceed with Certified, didn't regret that decision once. They always gave useful recommendations, were attentive, and constantly in touch. And most importantly (for us) they helped us to save some money!!

Lucy Zimmerman
2020-11-11

Vita was great. Helped my son with all the paperwork and got him very good interest rate. On the closing date called to follow up if everything went fine. Quite a pleasant experience. I would recommend this firm for anyone who is looking a mortgage broker.

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