For a lot of households, the end of the year brings extra pressure: credit card balances, higher costs, and a budget that feels stretched. If you own your home, you may have options. Some Ontario homeowners use their equity to replace high-interest debt with a single, lower-rate payment, which can ease monthly cash flow and make the new year feel more manageable. Here's how it works and what to weigh first.How much equity can you access?In Canada, refinancing generally lets you borrow up to 80% of your home's appraised value, minus what you still owe.Illustrative example: home value of $800,000 × 80% = $640,000. Less a $450,000 mortgage balance = up to $190,000 in potential borrowing room. Your actual amount depends on appraisal, income, credit, and lender approval.Common reasons homeowners refinance- Consolidate high-interest debt: Credit cards and personal loans often carry much higher rates than a mortgage. For example, $30,000 of credit card debt at 20% means roughly $500 a month in interest alone. Rolling it into your mortgage can reduce your monthly outlay.- Simplify your payments: One payment instead of several can make budgeting easier.- Renovate or repair: Fund a project that may also add value to your home.- Invest: Use equity toward a down payment on an investment property.- Cover education costs: Help a child with tuition and living expenses.The trade-offs to understand- Breaking your mortgage may trigger a prepayment penalty. Fixed-rate penalties are often the greater of three months' interest or the interest rate differential (IRD). Check your mortgage agreement before deciding.- Consolidating debt doesn't erase it. It moves it onto your mortgage. Spread over a long amortization, you could pay more total interest even with a lower monthly payment. Making extra payments helps.- Your home secures the loan. Borrowing more means more at stake if your finances change.- Costs add up: appraisal, legal fees, and the penalty if applicable.- Timing: A refinance takes time, usually several weeks from application to funding, so starting early gives you room to compare options without rushing.Do the break-even checkAdd up your total costs and divide by your monthly savings. If you'll keep the mortgage longer than the break-even point, the move may pay off.Is it right for you?That depends on your balance, rate, term, goals, and how close you are to renewal. I'll review your numbers, estimate your penalty and costs, and compare your options side by side.Get My Refinance Comparison:
Call or text Candice at 613-558-1143, or visit millsteam.ca/home-equity-review.
TMG The Mortgage Group | FSRA Licence #10315Candice Joy, Mortgage Agent Level 2 | 613-558-1143 | candicejoy@millsfinancial.ca | www.millsteam.ca
Rates and terms are subject to change and approval. Examples are illustrative only.