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Posted On Mar 01, 2026

 

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Lazar Mortgages | Smart Equity & Rate Strategy

Refinancing your mortgage can be a powerful financial tool.

Whether you want to access equity, lower your rate, consolidate debt, or restructure your payments, refinancing gives Ontario homeowners flexibility — if done strategically.

At Lazar Mortgages, we help clients understand not just how to refinance, but when it makes sense — and when it doesn’t.

Here’s what you need to know.

How to Refinance Your Mortgage in Ontario

Refinancing is very similar to applying for a new mortgage.

Step 1: Review Your Home’s Current Value

You can refinance up to 80% of your home’s current appraised value.

Example:

If your home in Mississauga is worth $900,000:

  • 80% = $720,000 maximum total mortgage

  • If your current balance is $600,000

  • You may access up to $120,000 in equity

Step 2: Mortgage Application & Approval

Just like your original mortgage, lenders will review:

  • Income verification

  • Employment status

  • Credit history

  • Debt-service ratios

  • Assets and liabilities

You’ll likely need:

  • Government ID

  • Pay stubs or T4s

  • Notices of Assessment (if applicable)

  • Mortgage statement

  • Property tax information

An appraisal is typically required ($350–$500 range).

You must also re-qualify under the federal mortgage stress test.

Step 3: Shop Lenders (You’re Not Stuck)

You are not obligated to refinance with your current lender.

We compare options across:

  • Major banks

  • Monoline lenders

  • Credit unions

Even if you stay with your existing lender, negotiating terms is important.

Why Refinance?

There are two primary reasons Ontario homeowners refinance:

1️⃣ Improve Your Mortgage Terms

You may refinance to:

  • Secure a lower interest rate

  • Extend amortization to reduce monthly payments

  • Shorten amortization to pay off faster

  • Switch from variable to fixed (or vice versa)

You don’t have to take out equity if your goal is simply restructuring.

2️⃣ Access Equity

Ontario homeowners have built significant equity over time — especially in markets like:

  • Toronto

  • Hamilton

  • Barrie

That equity can be used for:

  • Home renovations

  • Purchasing an investment property

  • Debt consolidation

  • Education funding

  • Starting a business

Remember: borrowed equity accrues interest. It should ideally be used to improve your financial position or long-term value.

When Should You Refinance?

Timing matters.

✔ Mid-Term Refinance

You may face a prepayment penalty if breaking your mortgage early.

For fixed-rate mortgages, this can include:

  • Interest Rate Differential (IRD)

  • 3 months’ interest (whichever is greater)

If refinancing allows you to eliminate high-interest debt (credit cards, unsecured loans), the penalty may still be worth it.

✔ At Renewal

Refinancing at renewal typically avoids prepayment penalties.

However, legal or administrative costs may still apply.

This is often the cleanest time to restructure.

How Much Can You Borrow?

Maximum: 80% of your home’s appraised value

Example:

Home value: $700,000
Max refinance: $560,000
Current mortgage: $500,000

Available equity: $60,000

The refinance must first pay off your existing mortgage — the remaining amount is available to you.

Costs Associated with Refinancing in Ontario

Before proceeding, understand the costs.

🔹 Mortgage Discharge Fee

Typically $100–$400 if switching lenders.

🔹 Appraisal Fee

Usually $350–$500.

🔹 Legal Fees

Varies depending on structure.

🔹 Assignment or Transfer Fee

If moving lenders, may apply.

🔹 Title Search & Insurance

Potential minor fees.

We always calculate your total cost vs. total benefit before recommending refinance.

What Happens to Mortgage Insurance?

If your original mortgage was insured through:

  • Canada Mortgage and Housing Corporation

  • Sagen

  • Canada Guaranty

You may need to repay insurance premiums again if:

  • You increase your loan amount

  • You extend amortization

  • You change lenders and restructure improperly

We review this carefully to avoid double insurance costs.

Alternatives to Refinancing

Refinancing isn’t the only option.

Home Equity Line of Credit (HELOC)

If you have 20% equity, you may qualify for a HELOC.

  • Maximum combined mortgage + HELOC = 80%

  • HELOC portion typically capped at 65% of value

  • No need to break your current mortgage

HELOC rates are usually variable and higher than refinance rates.

Home Equity Loan

A second mortgage from another lender.

Pros:

  • No need to break primary mortgage

Cons:

  • Higher interest rates

  • Additional lender fees

Blend and Extend

Some lenders allow you to:

  • Blend your current rate with a new lower rate

  • Extend your term

  • Avoid prepayment penalties

This can be a middle-ground solution.

Should You Refinance?

Refinancing can make sense if:

  • You’re consolidating high-interest debt

  • You need capital for value-adding renovations

  • You’re restructuring for better long-term savings

  • You’re investing strategically

It may not make sense if:

  • Penalties outweigh benefits

  • You’re near renewal anyway

  • A HELOC would accomplish the same goal

Final Thoughts from Lazar Mortgages

Refinancing isn’t just about pulling equity.

It’s about restructuring your mortgage in a way that strengthens your financial position.

At Lazar Mortgages, we:

  • Calculate penalty vs. savings

  • Compare refinance vs. HELOC options

  • Structure equity access strategically

  • Negotiate competitive lender terms

Before making a decision, let’s run the numbers properly.

 

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