Of the 10% of Canadians who refinanced their mortgages last year, 62% cited debt consolidation or repayment as the main reason for their refinance. This is because consolidating high interest debt – like credit card balances and auto loans – into a low interest mortgage can save you thousands in interest payments. Mortgage loans come with the lowest interest rates because they are securitized; or in other words, they are backed by an asset – your home. If you were unable to make your mortgage loan payments, the bank has a claim on your house, and this makes your loan less risky.
In order to determine if you can consolidate debt into your mortgage, you start by determining how much available equity you have. In Canada, this is determined by taking 80% of your home’s value and subtracting any existing mortgage balance.
As a refinance for debt consolidation requires you to terminate your existing contract with your lender and enter into a new mortgage, you will have to pay a mortgage break penalty. This is determined through a number of factors including your original mortgage contract date and current mortgage balance and rate.
We will start by showing you how much equity you have available to consolidate your various loans. We will then show you your total interest savings potential from a consolidation and also highlight the cost of refinancing your mortgage.
For the best mortgages in Barrie, Better mortgage service and better mortgage rates in Barrie call us today.