How to Refinance Your Mortgage Loan

Refinancing your mortgage in Ontario can be a smart financial move — whether you’re looking to lower your interest rate, access home equity, or consolidate debt. But how exactly does refinancing work, and what should Ontario homeowners know before diving in?

Here’s a step-by-step guide to help you navigate the refinancing process.

What is Mortgage Refinancing?

Refinancing is when you replace your existing mortgage with a new one — often with different terms. You can refinance with your current lender or switch to another one entirely. The new mortgage pays off the original one, and you start fresh with new terms, rates, or payment structures.

Reasons to Refinance Your Mortgage

Lower Your Interest Rate
Rates are always changing. Refinancing could help you lock in a lower rate and save on interest over the life of your loan.
Access Home Equity (Cash-Out Refinance)
If your home is worth more now, refinancing lets you borrow against that value. You can use this money for renovations, investments, or substantial expenses.
Consolidate Debt
You can roll high-interest debts like credit cards or personal loans into your mortgage and pay them off at a much lower rate.
Change Your Mortgage Term
Change from a variable rate to a fixed rate, or the other way around. You can also adjust the length of your mortgage for more financial flexibility.
Remove a Co-Signer or Spouse
Life changes — like divorce or inheritance — may require you to refinance to remove a name from the mortgage.

Step-by-Step: How to Refinance Your Mortgage in Ontario

1. Assess Your Financial Goals

Why do you want to refinance? Are you looking to lower payments, access equity, or change lenders?

2. Check Your Current Mortgage Terms

Look at your existing mortgage’s interest rate, remaining term, and any penalties for breaking your contract early.

3. Shop Around for Rates

Compare offers from banks, credit unions, and mortgage brokers. Use rate comparison tools or speak directly with professionals for the best deal.

4. Calculate the Costs

Refinancing comes with potential fees:

Prepayment penalty (if ending your mortgage term early)
Legal fees (~$1,000–$2,000)
Appraisal fee (~$300–$500)
Discharge fee (~$200)

Make sure your long-term savings outweigh the upfront costs.

5. Apply for the New Mortgage

Submit an application with the chosen lender. You’ll need:

Proof of income
Employment details
Current mortgage info
Property value and equity

6. Close the Deal

Once approved, a real estate lawyer will help you finalize the refinance. The new mortgage will pay off the existing one, and you’ll begin payments on your new loan.

Should You Refinance in 2025?

In Ontario, rates are stabilizing in mid-2025 after a rollercoaster few years. If you secured a higher rate during the pandemic or early 2023–2024, now is a good time to consider refinancing.

However, if you’re midway through a fixed-term mortgage, be cautious of prepayment penalties — they can be steep. Work with a mortgage advisor or broker who can run the numbers and advise if it’s worth it.

Final Tips

Use a mortgage refinance calculator to get a rough estimate of savings.
Talk to a licensed broker in Ontario — they can access multiple lenders and help you compare.
Don’t refinance too often — each time you do, there are costs involved.

Finial Thoughts

Refinancing your mortgage in Ontario can offer substantial financial benefits — if done strategically. To save money, access equity, or change your mortgage, review your options. Talk to a trusted mortgage expert.

Have questions or want to know if refinancing is right for you? Reach out and let’s chat — we’re here to help Ontario homeowners make informed mortgage decisions.