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Should You Refinance Your Mortgage?

by admin on March 12, 2015

As the Canadian mortgage rates continue to lower with the Bank of Canada announcing an interest rate of 0.75% (Jan. 21) and Prime lending rates at 2.85% (Feb.), should homeowners take advantage of this opportunity to refinance their home? Refinancing can be done with several different objectives, such as getting a lower interest rate, shortening the term, switching between variable-rate and fixed-rate mortgages, tapping equity, or consolidating debt. No matter the reason, when refinancing a mortgage, the main question to consider is: “Will I save money?”

If you currently have a variable-rate mortgage and you would like to refinance to get a lower rate, it may not necessary as your rate will decrease along with the prime. Whereas, with a fixed-rate mortgage, in a falling interest rate environment, it could be strategic to either refinance to get a lower rate or to convert to a variable-rate mortgage.

Another common reason to refinance is to consolidate debt from high-interest debt into a mortgage with a lower interest rate. This can be a smart financial decision to increase monthly cash flow if homeowners are able to refrain from continuously spending on credit.

Call Maple Leaf Mortgages to speak with one of our experts or apply online.

Written by Christy Lee

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