How do I refinance a mortgage in Ontario?

How do I refinance a mortgage in Ontario?

Want to cut thousands off your Ontario mortgage? Here’s the exact step-by-step plan to refinance and keep more cash in your pocket.

Why refinance now in Ontario

Interest rates change. Equity grows. Refinancing can lock a lower rate, reduce monthly payments, or free cash for renovations or debt consolidation. This guide focuses on mortgage refinance Ontario — practical, legal, and local details so you act fast and smart.

Quick checklist before you start

• Know your objective: lower rate, cash-out, consolidate debt, or change term.
• Check credit score and employment proof.
• Calculate home equity (current market value minus outstanding mortgage).
• Gather recent mortgage statement, property tax, and pay stubs.

Step-by-step: How to refinance a mortgage in Ontario

1. Define the goal

• Lower monthly payment vs. cash-out. Each has different costs and approval criteria.

1. Calculate equity and LTV

• Loan-to-value (LTV) = mortgage balance ÷ home value. Above 80% may need mortgage insurance (CMHC) for new borrowing.

1. Check breakage fees and penalties

• If you’re breaking a closed mortgage, ask current lender for the payout figure and penalty. Calculate net savings after penalty.

1. Shop lenders and mortgage brokers

• Compare banks, credit unions, and brokers. Use local Ontario lenders for better knowledge of property values in Toronto, Ottawa, Mississauga or smaller markets.

1. Review affordability rules (GDS/TDS)

• Lenders use Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to approve. Have proof of income and low debt-to-income for best rates.

1. Choose the right product

• Fixed vs variable, open vs closed, portability, and prepayment privileges. Match term length to your plan.

1. Apply and close

• Submit documents, get mortgage commitment, schedule appraisal if required, sign legal documents, register the new mortgage.

Costs to expect

• Appraisal fee
• Legal and registration fees
• Discharge and breakage penalties
• Mortgage default insurance if LTV > 80%

Local tips for Ontario homeowners

• Use local comps — Ontario markets vary greatly. Urban Toronto values behave differently than rural Eastern Ontario.
• Talk to a licensed mortgage broker and a local realtor who knows neighbourhood pricing.
• Watch provincial land transfer rules if you’re restructuring ownership during refinance.

Why work with a local expert

Tony Sousa is a local Realtor experienced in Ontario financing and mortgages. He connects homeowners with trusted mortgage brokers, explains penalty math, and reviews the numbers to confirm refinancing actually saves money. Contact Tony for a fast, no-nonsense review: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca

Refinancing is a powerful tool if done with discipline. Follow the steps above, calculate net benefit after penalties and fees, and use local expertise to lock the best outcome for your Ontario home.