How much of your home equity could you access?
Equity is the property’s value minus debts secured against it. For a typical residential refinance, total financing can generally reach 80% of the value accepted by the lender. Existing secured balances and costs must then be deducted. Income, debts, credit and the appraisal may further limit the amount. Specialized programs can have different rules.
Source: FCAC — Borrowing against home equity ↗
Fictional example · Not a financing offer
- Value accepted by the lender
- $500,000
- Secured debts to repay
- $300,000
- Total equity
- $200,000
- Assumed limit: 80% × $500,000
- $400,000
- Additional gross funds
- $100,000
- Assumed costs
- $8,000
- Hypothetical net cash
- $92,000
Assumptions: no other secured debt, costs paid from the proceeds and an eligible application. Approval and the actual amount are not guaranteed.
Which costs should you compare?
Request written estimates for the prepayment penalty, appraisal, notarial fees, registration or discharge, title insurance if required and administration. Some applications involve broker or lender fees; these should be explained before you decide.
Depending on the goal, compare refinancing now, waiting until mortgage renewal, using a separate loan, a secured line of credit if eligible, or savings. Consolidation can lower payments while turning debts into borrowing secured against your home and extending repayment.
Could a lower payment mean paying more interest?
Extending amortization spreads principal repayment over more payments. It may ease the monthly budget while increasing total interest.
Fictional comparison
$400,000 at 5.5%, monthly payments
- Over 20 years
- $2,737.57/month
- Interest over 20 years
- $257,015.64
- Over 25 years
- $2,441.57/month
- Interest over 25 years
- $332,469.78
Assumptions: nominal annual rate compounded semi-annually and unchanged throughout amortization; no fees or extra payments. Actual rates change at renewal. The payment falls by about $296, while interest rises by about $75,454 in this example.
Compare your own payment assumptions; the result is neither an offer nor an eligibility assessment.
What to bring to our first call
- The purpose of the financing and amount you have in mind.
- Your mortgage statement, maturity date and penalty estimate.
- Property tax bills, property details and an estimated value to confirm.
- Current income and debts you intend to repay.
- Renovation quotes or investment details, where relevant.
We’ll look at how the options fit your budget and timeline. If you’re financing another property, it’s also worth reviewing rental income, expenses and reserves.
Let’s look at what refinancing could mean for you.
We’ll look at your plans, your mortgage balance and the costs before deciding what to explore next. The lender sets the lending criteria and makes the final approval decision.
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