While refinancing a mortgage can be a source of simplicity and quick relief, accessing the strategy might not be right for everyone depending on their home’s value and the costs that come alongside it, according toRefinancing is essentially a “redo” on a mortgage, Tran tells Global News, which can change a homeowner’s interest rate and amortization while allowing someone to access the equity built up in their property for some quick cash.
Streamlining and consolidating debt with a single rate of interest can be particularly helpful amid the rising cost of borrowing in Canada, he adds.quarter-percentage point increase Depending on when and where they purchased their home — and whether that market saw a boost or drag on home prices — Tran says refinancing might not be the “right solution” for all owners.Penalties and fees associated with refinancing
For those refinancing from a lower rate taken out a few years ago, Tran says a lender will often offer a “blended” product that combines the original interest rate with today’s rates. While that will likely mean ending up with a higher rate on your mortgage than you had previously, it can be a vast improvement from certain kinds of high-interest debt such as credit cards if someone is consolidating, he says.