Mortgage Refinancing · Canada
Mortgage Refinancing: Replace Your Current Loan
Mortgage refinancing means replacing your existing mortgage with a new one, either to change your rate and term or to borrow more against the equity you have built. The old mortgage is paid out and the new one takes its place on title. It is different from a home equity line of credit, which is a separate revolving facility.
- Product family Mortgage Refinancing
- Availability Canada-wide, licence-dependent
- Cost basis Lender-set, within federal limits
- Where it is regulated Federal ceiling + provincial rules
Refinancing is a swap, not a top-up. Your current mortgage is discharged and a new mortgage is registered, with terms you choose at that point. Because the paperwork is fresh, this is also the moment when you can increase the loan amount and take the difference in cash.
What refinancing actually changes
You are replacing your existing mortgage with a new one, so the rate, term and payment schedule are all set again. If you refinance with a larger balance than you currently owe, the extra is paid to you and the charge on title is updated to match. Some people consolidate other debts into that larger mortgage. Note that a refinancing equity line of credit is a different product with its own terms; a refinance replaces a mortgage, while an equity line is a separate borrowing facility.
Reasons people refinance
- To move from a variable rate to a fixed one, or the reverse.
- To access equity for a renovation, tuition or a large purchase.
- To combine higher-interest debts into one mortgage payment.
- To change the amortization and adjust the monthly payment.
What the lender reviews
Refinancing is underwritten much like a new mortgage. Federally regulated lenders generally work to a total debt service ratio ceiling of about 44% and apply a qualifying stress-test rate above the contract rate under OSFI Guideline B-20. Canadian fixed-rate mortgages are compounded semi-annually by law, which affects how quoted rates translate into real cost. The Financial Consumer Agency of Canada covers the qualification basics.
Costs, penalties and timing
Breaking a mortgage term early usually triggers a prepayment charge, and for a fixed rate it is often the greater of three months' interest or an interest rate differential calculation. Add appraisal, legal, discharge and registration fees. If you are close to renewal, waiting can be far cheaper, so check your penalty quote before you move.
Refinancing your largest debt is a significant decision, and one worth reviewing with a licensed professional. LoanGoose is a loan matching and comparison service, not a lender. The lowest rates are only available to the most qualified applicants.
What it costs
| Rule | Figure | What it means | Publisher |
|---|---|---|---|
| Mortgage qualification — total debt service | about 44% | A stress-test rate above the contract rate is applied too (Guideline B-20). | Office of the Superintendent of Financial Institutions |
| Fixed-rate mortgage compounding | semi-annually | Required by Canadian law for fixed-rate mortgages. | Financial Consumer Agency of Canada |
| Criminal rate of interest (federal ceiling) | 35% per year | Above this, an agreement is a criminal offence. | Government of Canada (Justice Laws) |
No amount, term or rate is attached to any link on this page. Anything a lender offers you depends on your file and their own criteria.
What you need before you compare
- Your goal in one sentence. The amount, the date you need it, and the date you can repay it.
- Your real monthly surplus. What is genuinely left after every fixed cost — not what you hope is left.
- A current picture of your credit file. You can request a free copy of your report from each national bureau, and correcting an error is free.
- Every existing debt and its rate. Consolidation maths only works when you can see the whole board.
- The total cost of each option. Compare total repayment, not the headline rate.
- A check that the lender is licensed. Federally regulated banks fall under FCAC; provincial regulators license most other lenders.
Rules where you live
| Province or territory | Payday lending status | Local page |
|---|---|---|
| Newfoundland and Labrador | Licensed regime — federal cap applies | Mortgage Refinancing in Newfoundland and Labrador |
| Prince Edward Island | Licensed regime — federal cap applies | Mortgage Refinancing in Prince Edward Island |
| Nova Scotia | Licensed regime — federal cap applies | Mortgage Refinancing in Nova Scotia |
| New Brunswick | Licensed regime — federal cap applies | Mortgage Refinancing in New Brunswick |
| Quebec | Payday lending not licensed | Mortgage Refinancing in Quebec |
| Ontario | Licensed regime — federal cap applies | Mortgage Refinancing in Ontario |
| Manitoba | Licensed regime — federal cap applies | Mortgage Refinancing in Manitoba |
| Saskatchewan | Licensed regime — federal cap applies | Mortgage Refinancing in Saskatchewan |
| Alberta | Licensed regime — federal cap applies | Mortgage Refinancing in Alberta |
| British Columbia | Licensed regime — federal cap applies | Mortgage Refinancing in British Columbia |
| Yukon | Province-dependent | Mortgage Refinancing in Yukon |
| Northwest Territories | Province-dependent | Mortgage Refinancing in Northwest Territories |
| Nunavut | Province-dependent | Mortgage Refinancing in Nunavut |
Provincial rules change. Confirm the current position with the regulator before relying on it — see the sourced rules table.
Compare mortgage refinancing options
This is a matching step, not an application with us — we are not a lender. Checking does not commit you to anything, and no amount, term or rate is promised here.
LoanGoose is a loan matching and comparison service, not a lender. We do not make loans, set rates or make credit decisions. We may earn a commission when you click or apply through our links. The lowest rates are only available to the most qualified applicants.
Questions people actually ask
What does mortgage refinancing mean?
It means replacing your existing mortgage with a new one that has its own rate and term. The old mortgage is paid out and a new charge is registered. If the new loan is larger, the difference comes to you in cash.
How is refinancing different from a home equity line of credit?
Refinancing replaces your mortgage outright, so the whole balance moves to new terms. A home equity line of credit is a separate revolving facility that sits alongside your mortgage. One swaps the loan; the other adds a limit.
How much can you borrow when you refinance?
The new mortgage can cover your existing balance plus available equity, subject to lender limits, appraised value, income and your other debts. Federally regulated lenders generally work to a total debt service ratio ceiling of about 44% under <a href="https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-b-20">OSFI Guideline B-20</a>.
What does it cost to break a mortgage early?
Usually a prepayment charge. For a fixed rate it is often the greater of three months' interest or an interest rate differential calculation. Variable-rate mortgages commonly use three months' interest. Ask your lender for a written penalty quote.
Does refinancing hurt your credit?
The lender will check your credit as part of underwriting, and a new mortgage appears on your report. Over time, a well-managed mortgage with consistent payments can support your history. Missed payments do the opposite.
When is the best time to refinance?
Often near the end of your term, when the prepayment charge is smallest or gone. If your current rate is already competitive, the savings may not cover the fees. Run the numbers before you decide.
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Sources for this page
- OSFI Guideline B-20 — residential mortgage underwriting —
- FCAC — debt and borrowing —
- Criminal Code s. 347 — criminal rate of interest —
- FCAC — debt and borrowing —
Every figure on this page is attributed to the publisher above. Where a value could not be verified against the publisher's own publication, it is left out rather than estimated.