Mortgage Refinancing & Debt Consolidation in Ontario

Your mortgage can be more than a payment. Sometimes it can be a tool to improve your overall financial picture.

Refinancing your mortgage may allow you to access home equity, consolidate higher-interest debt, fund renovations or restructure your mortgage to better fit your current financial goals.

But refinancing isn't automatically the right answer just because a lower rate or monthly payment is available.

At COPA Mortgage, we look at the whole picture — your current mortgage, penalties, debts, available equity, cash flow and longer-term goals — to help you understand whether refinancing actually makes financial sense.

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Why Do Homeowners Refinance Their Mortgage?

Consolidate Higher-Interest Debt
Credit cards, lines of credit and other consumer debts may carry significantly higher interest rates than mortgage financing. Refinancing may allow you to consolidate some of those debts into your mortgage and simplify your monthly payments.

Renovate or Improve Your Home
Home equity can sometimes be used to finance renovations or major home improvements without relying entirely on higher-interest unsecured credit.

Access Home Equity
If you've built equity in your home, refinancing may allow you to access some of it for renovations, investments, education or other significant financial needs.

Change Your Mortgage Structure
Your mortgage needs today may be very different from when you originally bought your home. Refinancing can sometimes be used to change your mortgage amount, amortization, lender or other features.

Improve Monthly Cash Flow
Restructuring debts or changing your mortgage may reduce required monthly payments in some situations. We also look at the longer-term cost — because a lower monthly payment doesn't necessarily mean you're paying less overall.

Navigate a Major Life Change
Separation, divorce, the loss of a spouse or other major financial changes can affect what you need from your mortgage. Refinancing may be one option for restructuring finances or accessing available equity.

Should I Refinance My Mortgage to Consolidate Debt?

Refinancing to consolidate debt can make sense in the right situation, but a lower monthly payment doesn't always mean you're saving money.

Credit cards, unsecured lines of credit and other debts often carry much higher interest rates than a mortgage. Moving those balances into your mortgage may reduce the interest rate on the debt and improve monthly cash flow.

But there are other costs to consider. Breaking your existing mortgage may involve a prepayment penalty, refinancing can include legal or appraisal costs, and extending debt over a longer amortization can increase the total interest you pay over time.

That's why we don't look at the mortgage rate alone. At COPA, we compare the cost of your existing debts, your mortgage penalty, available equity, new mortgage options and the longer-term impact before recommending a strategy.

Lower payment ≠ lower total cost

A refinance that saves hundreds of dollars each month can still cost more over the long term if the debt is stretched over many additional years. We help you look at both monthly cash flow and total borrowing cost before making a decision.

How Much Equity Can I Access When Refinancing?

In Canada, homeowners can generally refinance their mortgage up to 80% of the home's appraised value, subject to lender qualification and approval.

The amount of equity you may be able to access depends on your home's value, your existing mortgage balance and any other financing secured against the property.

For example, if your home is worth $700,000, 80% of the value is $560,000. If your existing mortgage balance is $400,000, there could potentially be up to $160,000 of available equity before considering qualification, penalties, fees and other lending requirements.

Having available equity doesn't necessarily mean you should use all of it. We help you determine how much you actually need and what the new mortgage would mean for your monthly payment, amortization and overall borrowing cost.

What Does It Cost to Refinance a Mortgage?

Refinancing isn't free, so it's important to look at the costs before deciding whether it makes sense.

Depending on your mortgage and lender, costs may include a prepayment penalty, appraisal fee, legal or registration costs, discharge fees and other lender fees. If you're refinancing before the end of your current mortgage term, the prepayment penalty can sometimes be the largest cost.

At COPA Mortgage, we compare the potential benefits of refinancing against the costs involved so you can see the numbers before making a decision.

  • Yes. If you have enough available home equity and qualify with the lender, refinancing may allow you to use equity to pay off higher-interest debts such as credit cards or unsecured lines of credit. It’s important to consider the costs of refinancing and the longer-term interest impact before deciding if it makes sense.

  • Homeowners can generally refinance up to 80% of their home’s appraised value, subject to lender qualification and approval. Your existing mortgage and other financing secured against the property will affect how much equity may be available.

  • Sometimes, but not always. Breaking a mortgage before maturity may result in a prepayment penalty and other costs. We compare those costs with the potential benefits of refinancing to help determine whether making a change now or waiting until renewal makes more financial sense.

  • Potentially. If you have sufficient equity and qualify, refinancing may allow you to use home equity to pay off higher-interest credit card debt. This can improve monthly cash flow, but extending short-term debt over a longer mortgage amortization can increase the length of time you're paying for it.

  • A mortgage application generally involves a credit inquiry, and lenders will consider your credit as part of the qualification process. The impact will depend on your individual credit profile and other factors.

  • Potentially. Mortgage options aren't limited to traditional banks. Depending on your equity, income, credit and overall financial situation, options may be available through traditional, alternative or private lenders.

Not Sure If Refinancing Makes Sense?

A lower payment or lower rate doesn't automatically mean refinancing is the right move. We can review your current mortgage, debts, available equity and financial goals, compare the numbers and help you understand your options.

Sometimes refinancing makes sense. Sometimes it doesn't. Our job is to help you know the difference.

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