Mortgage Refinancing

Learn what it means to refinance your mortgage loan and how you can reach your goals.

What is refinancing?

Refinancing means renegotiating your existing mortgage loan agreement, usually to access the equity in your home, or to lower other borrowing costs by taking advantage of a lower interest rate. Refinancing can help you consolidate debt or pay for other large expenses like education or renovations. When you refinance, you select new terms for your mortgage loan agreement.

If you refinance at the end of your mortgage term, you’ll probably avoid prepayment charges. If you decide to refinance before your term is done, the prepayment charges might be relatively small compared to the savings offered by getting a new mortgage loan with a lower interest rate.

Is refinancing right for me?

Once you evaluate your goals, you can decide whether refinancing makes sense.
  • Debt consolidation. Merge higher interest debts into one manageable payment with a lower interest rate.
  • Home renovations. Get the money you need to renovate or make repairs.
  • Tuition. Cover education costs for yourself or someone else.
  • Investing. Take advantage of an investing opportunity (speak to your tax advisor first).

Calculate how much you can borrow

Start with the estimated current value of your home. Let’s say its $300,000. Because you can only borrow a maximum of 80% of your home’s value, multiply $300,000 by 0.8 to get $240,000. Next, subtract the outstanding balance of your mortgage – let’s say its $110,000 – so we get $130,000.

Finally, subtract any other outstanding debts secured by your home - say a line of credit worth $10,000 – that leaves $120,000. So in this example, you could borrow an additional $120,000 in a refinancing.

Calculate your prepayment charge

Determine one of the costs of refinancing.

Other useful information

Have a Mortgage?

Resources you’ll need if your mortgage is up for renewal or you want to refinance your mortgage.
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Our Rates

Choose the rate that’s right for you.
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TD Home Equity FlexLine

Use the value of your home to access a line of credit.
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