Refinancing Your Mortgage

There's good debt and bad debt.
 
Mortgages generally qualify as good debt: they are usually available at the lowest possible rates, they represent a good investment in a (generally) appreciating asset, and they make home ownership possible. Bad debt saddles you with high interest rates - often on depreciating assets. High credit card debt is one of the worst, and afflicts most Canadians at some point in their financial lives. But if you have equity in your home, then you have an opportunity to turn bad debt to good debt - by refinancing your mortgage and rolling high-interest debt into your mortgage for big interest savings. Mortgage brokers can talk to you about refinancing at any time.

There are many advantages to refinance your mortgage

1. You can lower your monthly payments
2. You can pay down your mortgage faster if you refinance then keep your payments the same making more of a payment on your principal.
3. You can take equity out for debt consolidation, vacations, home improvements or your kids college
4. You can consolidate a first & second mortgage into one mortgage and have lower payments

If you are looking for home mortgage refinancing it is a good idea to call your current mortgage holder first to see what the exact penalty will be for breaking your mortgage early. Often there will be a 3 month interest penalty or an IRD (interest rate differential) penalty for breaking your mortgage. The penalty can be often refinanced into the new mortgage. The exact cost will depend on how your mortgage lender calculates the fee. This will also depend on your current interest rate and the length of time left on the mortgage.

Rates are still near record lows. If you'd like to have a conversation about refinancing your debt, talk to a professional?


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