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What is
Refinancing?
Refinancing means replacing your existing mortgage with a new one, to secure a lower rate, reduce monthly payments, or tap into your home’s equity. It can be a smart financial move that can help you make the most of your mortgage.
Can You Really Save Money by
Adding Your Debts to Your Mortgage?
When it comes to managing debt, most people don’t realize their mortgage can be a powerful tool. You may have heard our ad about refinancing — but how does it actually help you pay off debt faster by adding it to your mortgage? Here’s a real client example that breaks down how it works.
Meet Client A
They were 2 months away from renewing their mortgage. Right now, they have a low covid interest rate of 1.99% and 20 years left to pay.
What They Owe Right Now:
Mortgage :$286,274
Payment: $1,445.75/month
Credit Cards & Loans (totalling $49,898):
- $12,263 at 21% interest → $367.89/month
- $19,889 at 11% interest → $596.67/month
- $9,820 at 10% interest (interest-only) → $81.83/month
- $7,926 at 19% interest → $237.78/month
Total Debt Payments: $1,284.17/month
Total Monthly Payments
(Mortgage + Debts):
$2,729.92/month
What Happens if They Don’t Refinance?
If they keep making only the minimum payments for 5 years, here’s where they’ll be:
Total Monthly Payment: around $3,050/month
They’ll still owe about $24,339 on their credit cards and loans
Mortgage (at 4.24% renewal rate): they’ll owe $235,436
Total Owing After 5 Years: $259,775
What Happens if They Do Refinance?
We added the $49,898 of debt into their new mortgage.
The new mortgage is: $336,172 at 4.24%
Option 1
Save Money each Month
- New mortgage payment: $2,324.59/month
- Still owe the same after 5 years as if they didn’t refinance – $235,436, with 15 years left on the amortization
- Savings: $725/month × 60 months = $43,507 saved!
Why this works: They make smaller monthly payments and still owe the same in 5 years.
Option 2
Pay Off More Debt Faster
- Keep payments similar (to not refinancing): about $3,042/month
- New amortization: 11 years and 8 months – by keeping the mortgage payments at $3,042 per month it decreases the amortization
- After 5 years, they owe only $211,916 on the mortgage
They pay off nearly $47,858 more than if they didn’t refinance!
Why this works: They don’t change their payment amount, but now all that money goes toward debt faster.
Option 3
Lower Payments
Maybe one partner lost a job and they need to lower monthly costs.
- Stretch the mortgage to 30 years amortization
- New payment: $1,644.53/month
- Saves $1,405/month compared to before
- Over 5 years, they save $84,310 in payments
BUT
- They will owe $305,045 after 5 years
- That’s $69,609 more than in Option 1
How Do You Refinance a Mortgage?
Refinancing a mortgage involves replacing your current mortgage with a new one, usually to get a better interest rate, change the loan term, or access equity. The basic steps include:
- Evaluate your current mortgage and financial goals.
- Shop around for the best rates and terms from lenders or a mortgage broker.
- Apply for the new mortgage, providing income, credit, and property information.
- Underwriting and approval — the lender reviews your application and property.
- Close the new mortgage and use it to pay off your existing loan.
The Collin Bruce Mortgage team is here to make the process faster, easier, and ensure you find the best deal for your situation.
Refinancing a mortgage can help homeowners save money, reduce interest rates, or adjust their loan terms to better fit their financial goals. Key benefits include:
- Lower monthly payments by securing a better interest rate
- Paying off your mortgage faster with a shorter term
- Accessing home equity for renovations, debt consolidation, or other expenses
- Switching from a variable to a fixed rate (or vice versa) for more stability
Overall, refinancing can improve your financial flexibility and help you make the most of your home investment.
Learn more about refinancing here:
Pros and Cons of Mortgage Refinancing
What Are the Benefits of Refinancing a Mortgage?
Why Use The Collin Bruce Mortgage Team for Refinancing?
The Collin Bruce Mortgage Team has over 20 years of experience and has been recognized as Dominion Lending’s #1 Mortgage Broker in Canada for 17 years in a row. They specialize in personalized refinancing solutions, helping homeowners secure competitive rates, flexible lending options, and strategies tailored to individual needs.
Serving clients across Canada, their focus is on making the refinancing process simple, stress-free, and designed to help you achieve your homeownership goals.
Want to know if refinancing could save you money?
Every Situation Is Unique.
Even if you’re mid-term or not up for renewal yet, it could still make sense. We’ll crunch the numbers for you.
Find out if you can lower your payments with a Refinance
