This blog is intended to provide general information and is not a substitute for legal advice. Please consult our qualified attorney for guidance specific to your case.
Refinancing your home can offer several benefits, from lowering your monthly mortgage payments to tapping into your home’s equity. In Alberta, homeowners may find refinancing particularly appealing with fluctuating interest rates and various lending options available. Here's what you need to know before deciding if refinancing is the right move for you.
Why Refinance?
Homeowners typically refinance for one of three reasons: to reduce their interest rate, to change the loan terms, or to access home equity for major expenses like renovations, debt consolidation, or investments.
Lower Your Interest Rate
With interest rates historically fluctuating, refinancing allows homeowners to secure a lower rate and reduce monthly payments. This can free up money for other financial goals or help you pay off your mortgage faster.
Tap Into Home Equity
In Alberta, rising property values may provide homeowners with more equity. Refinancing with a home equity loan or line of credit can provide cash for home improvements, education, or consolidating higher-interest debt.
Shorten Loan Terms
If you're financially stable, refinancing to a shorter loan term could help you pay off your mortgage faster, saving on interest over time. While monthly payments may increase, the overall cost of the loan will decrease in the long run.
Closing Costs
It’s important to factor in the closing costs of refinancing, which can range from 2% to 5% of the loan amount. However, in some cases, lenders may offer to cover these costs or roll them into the new loan.
