Do you own a home? Would you like to change your financing for something better? Sometimes that means refinancing into a mortgage with a lower interest rate, sometimes that means refinancing into a longer amortization and lowering your monthly payments, other times it means borrowing out some of the equity in your home so that you can use that money to pay off debts, improve your property, or spend it on something fun.
Borrow out up to 90%
Recent changes by the federal Government have attempted to encourage Canadians to avoid pulling all of the equity out of their real estate. As a result, the most that you are allowed to refinance out of a property that you own is 90% of the appraised value. It is also important to keep in mind that once you borrow over 80% of the value of the home, you will be required by the lender to buy mortgage insurance (see the link to CMHC)
As a result, most refinances tend to be to 80%, which is the maximum you can take out without purchasing the insurance. With current interest rates being so low, many homeowners are taking advantage of the situation and getting their money out to capitalize on other opportunities that are presenting themselves in the market.
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