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A refinance means breaking your current terms and conditions to create a new mortgage with new terms and conditions — whether with your current lender or a different one.

The right time to refinance depends on your needs and situation. You may want to wait for your renewal (which comes without pre-payment penalties incurred to break your term).

You can refinance at any time if you feel the benefits of accessing helpful funds or options outweigh the costs of breaking your existing contract.

Occasionally, a lender may allow a refinance mid-term, sometimes called a blend-and-extend, which can help you keep a lower rate (fees may apply).

 Starting January 15, 2025, 

Eligible homeowners, (Requirements), who want to build a secondary suite can access an insured refinance for up to 90% of their 'improved property' value (capped at a $2M home value) for construction funds. 

A thing to note is the amortization may be extended from 25 years to 30 years and if extended there is a premium of 0.2%  is added to the mortgage insurance premium.

• Are you tired of making multiple (four or five) different debt payments, or only minimum payments, each month?
• Are you considering buying a rental income property and need cash for the down payment?
• Are creditors charging higher interest rates than today's current mortgage rates?
• Do you wish you had more money to purchase stocks and bonds or make other financial investments?
• If you have more complex mortgage needs I have more flexibility than the big banks and often turn a no to a yes.

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If, before the end of your current term, you want to terminate the mortgage, pay a larger amount down, or pay it off entirely, you may be charged costly penalties, along with admin fees.

• An early payoff penalty may apply if you decide to pay off the entire mortgage all at once, especially before the end of your term. It's usually charged as a percentage of the overall unpaid principal balance.
• 3 months of interest is typically charged for exiting a variable-rate mortgage.
• Interest Rate Differential (IRD) comes into play for fixed-rate mortgages. Lenders will charge whichever is greater, 3-months interest or the IRD. The IRD is calculated as the difference between your original mortgage interest rate and the current interest rate, applied to the amount of your remaining term of mortgage (lenders may calculate the IRD differently; some may be a lot higher than others).

If you have very restrictive terms, any change can cost you a lot more than usual, such as a change in payment frequency, wanting to put more down on your mortgage, or if you want to sell your home.

Open-term mortgages have the most flexibility with no penalties for payout, though some admin fees may apply.

In Canada a renewal resets your next term with the lender, keeping the same mortgage terms and conditions. For example you may have a 25 year amortization but you signed up with the lender for 3 years. At the end of the 3 years

which is usually about 4-6 months before the maturity date, you can agree to re-sign with your current lender or switch to a different one.

A refinance changes your terms and is usually an uninsured mortgage product, which means a homeowner can no longer access lower insured mortgage rates.

A refinance can take approximately 3-4 weeks (or more) to finalize the details, especially since an appraisal is usually required.

So, if you're thinking about a refinance, make sure to allow enough (mortgage) time, regardless of whether you're waiting for your renewal period, switching lenders, or breaking your term,

I will  help make it simple and stress-free, walking you through the process and answering your questions — and then you're off to a new mortgage agreement that works better for your situation.