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Mortgage refinance in Canada

If it’s time to change the terms of your mortgage contract, it may be time to refinance your mortgage. Refinancing can mean changing the terms of your mortgage contract or withdrawing an amount based on the value of your home. By withdrawing a sum based on your equity, you open new financial opportunities.  

What is mortgage refinancing?

Refinancing your mortgage means paying off an existing mortgage loan by starting a new one, either with the same or a new lender. Most often, homeowners refinance to take advantage of lower market interest rates, access equity in their homes, consolidate loans, or reduce their monthly payments with a longer repayment term. 

When you refinance your mortgage, you can either get a cash-out mortgage refinance or a rate-and-term refinance. 

  • Rate-and-term refinance—as the name suggests, rate-and-term mortgage refinancing changes your mortgage loan rate and term. For instance, you can refinance a 10-year mortgage to a 20-year term.
  • Cash-out refinance—cash-out refinancing gives you a new mortgage and lets you borrow more than you owe. You can keep the difference in cash and use it for temporary financial needs.   

Getting a mortgage with lower interest rates is often the primary and best reason to refinance. When interest rates drop, consider refinancing to shorten your mortgage repayment and save money on the interest. 

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How to qualify for mortgage refinancing in Canada

Refinancing your mortgage is a long-term commitment. Before you approach a lender, you will need to ensure that you have enough reason to refinance. To qualify for a mortgage refinance, make sure you satisfy the following criteria. 

  • You’ve owned the house long enough—how soon you can refinance after buying a home varies by the type of loan and lender. Generally, your name must be in the title of your home for at least six months for most refinancing loans.
  • You have enough equity—you need to build up enough equity in your home to qualify for a refinance. The more equity you have, the better it is for refinancing.
  • You have sufficient income—your source and income may differ from when you secured your previous mortgage. Thus, you would need to prove to the lenders that you can repay the refinanced loan on time. 
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Mortgage refinancing or home equity loan?

Cash-out refinancing and home equity loans allow you to access your equity as a loan, and you can use the funds for any of the following reasons. 

  • You are considering options for debt consolidation—taking out a sum to consolidate debt can be one of the best uses for a cash-out refinance or a home equity loan. The interest is comparably lower than the accumulated interest costs of multiple financial obligations. 
  • You are thinking of starting a new business—new businesses need a lot of financial support in the beginning, but qualifying for a traditional business loan requires a strong credit history and a business plan approval. Instead, you can access your equity with fewer requirements for your business idea.  
  • You are planning to buy a new property—you can get another piece of property for your relatives or children, and you need to provide a down payment. Sometimes, a home equity loan is more than enough for the down payment.  
  • You are thinking of renovating your home—some renovation projects can cost hundreds of thousands of dollars. If you have enough equity, you can expense it with a home equity loan or through a cash-out refinance rather than on your credit card.  
  • You need money for your child’s tuition—the equity in your property can provide more than enough to cover the cost of tuition and other educational expenses. The money is potentially more substantial and has more purpose flexibility. 
  • You have an urgent medical situation—home equity loans will be the ideal option between the two in an urgent situation. The process is quicker than refinancing.  
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Key benefits of mortgage refinancing from Alpine Credits

A young man smiling after refinancing his mortgage.

Alpine Credits has been in the business for more than 50 years and their experience is something you can bank on. Here are some reasons why we can be a perfect fit when it comes to refinancing your mortgage.

  1. We do not apply the same stringent lending criteria as  traditional banks.
  2. We offer quick loan options regardless of your age, income, and credit history
  3. We offer lower interest rates compared to other lenders
  4. We offer approvals within 24 hours and funding within a week.
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Refinance with a home equity loan from Alpine Credits 

Refinancing or getting a home equity loan is not as daunting as it sounds. Experts like Alpine Credits make it simpler for homeowners. 

  1. Apply online—you can finish the application online within minutes. You only need to provide some personal details and the appraised value of your home rather than your credit score or income. 
  2. Receive approval—within 24 hours, you’ll hear back from Alpine Credits. You’re eligible for the loan if you own at least 25% of your home.  
  3. Use your home equity loan—the money is for any of your financial goals. You have the flexibility to use it for multiple purposes. 

If you have more questions about home equity loans, contact a Financial Solutions Specialist at Alpine Credits. They’ll be able to answer all your questions and be able to provide you with a solution. The call is obligation-free, and you can call any day.  

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Happy couple applying for a loan online.

Find loan options in your area

Click on the links below to get started, and see the mortgage options available to you, in the provinces we serve across Canada!

Frequently Asked Questions 

Refinancing doesn’t have to be done specifically every five years. Most Canadians choose 5-term contracts on their home and find themselves refinancing when their original mortgage contract is over. Otherwise, refinancing can be done at any time. 

You can refinance anytime during your term, but the early penalties will vary according to the lender. The closer to the end of your term that you refinance, the fewer penalties you may have to pay.

Depending on the lender, you could need a minimum of 20-30% equity. With Alpine Credits, you need at least 25% equity to withdraw from your home equity.

Before refinancing, research your options and consider what it means for your finances. Refinancing is not the best choice for every homeowner, so it’s important that you consider the entire cost, including additional fees, interest, and additional commitment. 

The primary downside to typical refinancing is that you start a new mortgage contract. You don’t get to keep the previous rates you had, which can mean that your monthly mortgage payments will change.

The two most common are rate-and-term refinances and cash-out refinances. With rate-and-term, you can change your mortgage term and interest rate, while a cash-out refinance allows you to access a loan from your equity.