Mortgage Refinance

Secrets of Debt Consolidation In Canada: What You Should Know

Debt consolidation can be an effective method of making your debt repayment more manageable. You wouldn’t be the only one with debt hanging around your neck. It is a Canadian thing, with the average Canadian debt ratio shooting above 70%. This is a remarkable departure from how things were 20 years ago.

Debt consolidation is the combination of the amounts you owe into one. This includes credit card debts on multiple accounts and other personal loans. So, instead of keeping up with multiple debts, you only focus on repaying a single debt.

You can consolidate yourself through different means depending on your choice or whether you have a property. If you have a home in Canada, you can use a mortgage to consolidate your debt. However, many Canadians find debt consolidation confusing, but you are lucky; by the end of this post, you will know everything about it.

What is Debt Consolidation

Essentially, this is when you take a large loan to replace and pay off your smaller loans. This large loan will allow you to pay your loans at a go.

So, instead of focusing on additional payments such as credit card payments, auto loans, and other personal loans. The new loan has a better interest rate than your previous loans if you are lucky. So, you get to repay the loan, and you will pay it cheaper.

One of the hallmarks of an efficient financial system is that it provides people with the ability to live above their means when the need arises.

The Canadian financial system is pretty efficient, with different loans to help people with what they need. Sometimes people need more than they can afford at that moment, and as such, they take different loans to meet up with obligations.

Debt consolidation is a way to ensure the easy repayment of these loans as you will be able to combine all you owe.

To consolidate, you have to be smart about it. You have to make sure to have a payment plan that you will follow. Asides from having a plan, there are other things that you have to note.

Things To Note about Debt Consolidation

Let your Debt Consolidation Loan Have Lower Interest

A debt consolidation loan should make repayment easier and not burden you. If you can afford it, consult a financial advisor or planner to review the debt consolidation loan you want to get.

If you can’t afford it, you have to read the terms and conditions of the loan carefully. Focus on the interest rate, fees, and duration.

Consult an Expert to Draw a Plan for You

In this situation, the advice of a financial planner or advisor can be crucial. They will use their experience to develop a plan to make repayment easier.

The expert will help you draw a budget, amount to repay monthly, and plan b for when you suffer income challenges.

Above the Monthly Fee

If you don’t want to deal with a financial advisor or planner, you should be doing. Pay above whatever your lender has set as your minimum fee. This will allow you to make your payment faster and easier. Also, it helps you keep up if you have income challenges.

Have a Payment Plan B

When consolidating your debt, you have to plan for all eventualities. One of such eventualities is a challenge to your income. So, to prevent this, pay above the minimum when you can. Also, make other plans when you can.

Different Ways to Consolidate Your Debt

You can consolidate your debt in different ways. Some of these ways could involve using your mortgage. Below we have treated these different ways. Read and choose the one that best fits you.

Debt Consolidation Loans

These loans help you combine all your loans into one you obtain from a credit union, bank, or other financial institution.

You can use this loan to complete your unsecured and secured debt payments. Getting a lower interest rate for your debt consolidation loan or even getting the loan depends on your collateral.

You can have different collateral, but your home is the best to help you get a lower interest rate. Also, your credit score is an added advantage. Institutions could only need you to have collateral or a good credit score. Sometimes they could require both.

It is not compulsory to use your home as collateral, but as we have said, it could be essential to get you a cheaper interest. So, if you don’t want to use your home as collateral, approach a bank, but it would be crucial to have an excellent credit score.

Using Mortgage Refinance

You can use your existing mortgage to consolidate your debt. However, there is a catch. You would have to break your current mortgage early, and breaking your mortgage early usually comes with a penalty.

Refinancing your home mortgage gives you access to 80% of your home value after deducting the remaining mortgage. With this 80%, you would combine your mortgage and other amounts owed into a single one.

Home Equity Loan

This allows you to access the available equity in your home. You can calculate the available equity by removing your home’s current market value from the remaining amount you’ll pay as a balance.

You will use this available equity to consolidate your owed amount and pay all of them at once.

Using your First Mortgage to Consolidate your Debt

If you want to consolidate your owed amount and want to get a mortgage, you can do everything at once. However, you must be ready for the lender to scrutinize you thoroughly for this to be possible.

The lender will examine your loan to value ratio or LTV. This ratio will allow your lender to determine how big of a risk it is to lend you your mortgage sum. If your LTV ratio is below 80%, your mortgage lender could allow you to combine loans.


Debt consolidation could help you solve your money problems. However, as we have mentioned, you have to plan excellently.

Best Mortgage Online can help you with your debt. Call us right now at 1-855-567-4898 for consultation.

Mortgage Refinance

TD Bank Mortgage Rates

TD Canada Trust is a leading bank based in Canada. It is one of the top 10 North American banks, and for a good reason. TD Canada offers multiple professional financial services, intending to change the lives of their customers and community. Mortgage services are amongst their many services.

With TD Canada, you can get a mortgage on your home, whether you are a new homeowner or you are making a switch from a different bank. Their mortgage services are comprehensive, affordable, and flexible. Read on to learn more about TD’s mortgage rates and options.

Canada’s Mortgage Rules

TD Canada adheres strictly to the mortgage laws of Canada as a country. Any customer who wants to apply for a mortgage with TD must be familiar with these rules. While your mortgage consultant might run over them with you, there is no harm in knowing some of the basics of Canada’s new mortgage rules. So here they are.

Stress Test: Customers who apply for mortgages are required to pass the qualifying criteria, also known as the stress test. This will determine whether they can afford a mortgage if interest rates increase. A TD mobile mortgage specialist can shed more light on the qualification criteria for individual customers.

Uninsured mortgage rates: Customers should know that the Office of the Superintendent of Financial Institutions has raised the qualifying rate for uninsured mortgages. From the previous 4.79%, it has now been increased to 5.25%. For customers with down payments over 20%, the stress test either uses the new qualifying rate of 5.25% or the customers’ mortgage interest rate plus 2%, depending on which is higher.

Insured mortgage rates: For customers whose down payments are less than 20%, the stress test uses the insured qualifying rate or the customers’ mortgage interest rate plus 2%, depending on which is higher.

These are just a few things to know about the current mortgaging laws before applying for a mortgage loan with TD.

TD’s Mortgage Options

At TD Canada Trust, they offer many different mortgage plans and options for customers. This allows them to cater to the individual needs of customers. Their options include:

First-time homeowners

TD understands the pressure and confusion that accompanies purchasing a home for the first time. This is why they offer mortgage services specifically for first-time homeowners. These services help customers decide on the best home and mortgage plan to suit their budget and tastes. The TD mortgage rate Canada for first-time homeowners varies.

First-time homeowner mortgage services include:

– Helping customers make smart financial decisions on how much they can afford to spend on a mortgage, including their current and future expenses.

– Assisting customers with pre-qualification for loans by assigning them to a loan officer.

– Walking customers through the process of mortgage application with sound financial advice.

– Educating customers on the real estate market, especially as new home buyers, and how to make offers on homes.

Home Loans and Down Payments

TD Bank offers mortgage plans for customers who can only afford to make low down payments due to money shortages. Their home loan options and their features include:

FNMA Home Ready: 3% minimum down payment and flexible underwriting.

TD Bank Right Step Mortgage: 3% minimum down payment and payments can come from gifts or grants.

FHA Mortgage: 3.5% minimum down payment with no income limits.

FNMA 97 Mortgage: 3% minimum down payment and only applicable for first-time home buyers.

Veterans Administration Mortgage: no down payment or mortgage insurance required.

FNMA Refi Now: high debt-to-income ratios and no cash back at closing.

You can get more information about all these home loans and down payment options at TD Bank’s official website.

Construction Loans

TD construction loans offer services to customers that are building new homes or renovating their current homes. TD construction loans offer the following features:

– Flexible down payments

– Both fixed and adjustable-rate options

– Interest-only payments during construction

– Initial loan payment

– Fixed-rate mortgage after construction.

The application requirements for construction loans can be found on TD Bank’s official website.

Mortgage Refinancing

TD Bank also offers mortgage refinancing services. These are applicable for customers who want to change their mortgage plan, lower their monthly payments or make significant purchases.

To apply for mortgage refinancing, customers will have to fill out a mortgage application and submit documents like credit reports. Closing costs will apply and can be up to 1-3% of the new mortgage cost. TD also offers a mortgage refinance calculator to give customers an idea of the probable cost of their new mortgage loan after refinancing.

Mortgage Affordability Calculator

TD offers the opportunity for customers to calculate a range of affordable house prices. This information is useful as customers enter the real estate market and trustworthy as it gives them a price range. All that customers have to do is fill out a questionnaire survey with some key information that will allow the calculator to give you a value for a home you can afford. This information includes details such as your desired location, annual income, monthly expenses, and others.

TD Mortgage Rate Canada

TD mortgage rates in Canada are as follows currently:

Fixed-Rate Mortgages:

I year fixed closed – 2.79%

2 year fixed closed – 3.54%

3 year fixed closed – 3.69%

4 year fixed closed – 4.14%

5 year fixed closed – 3.99%

6 year fixed closed – 5.24%

7 year fixed closed – 5.35%

10 year fixed closed – 5.06%

1 year fixed open:


6-month convertible mortgage:


5-year variable closed:

TD mortgage prime rate – 0.70%

5-year variable open:

TD mortgage prime rate + 1.00%

Annual percentage rates apply and vary and can be viewed on TD’s website.


TD Bank is a versatile and highly rated bank that offers services of all kinds. The mortgage plans create avenues for all classes of customers to suit their unique needs. The TD mortgage rate in Canada is affordable and can be fixed or variable, depending on what is most convenient to customers.

Whatever your mortgage needs may be, TD bank has an option for you.

TD Mortgage Interest Rates – Frequently Asked Questions.

What is the TD mortgage prime rate?

The TD mortgage prime rate is the standard TD mortgage interest rate for variable rates. Customers that apply for variable interest rates pay in terms of ‘TD mortgage prime rate + or – interest rate’. The TD mortgage prime rate is currently 3.35%

What is the difference between a fixed and variable interest rate?

TD mortgage interest rates can be fixed or variable. Fixed rates remain constant throughout your mortgage payment time. Variable rates may vary monthly depending on changes in the TD mortgage prime rate.

Can mortgage rates be negotiated?

While TD bank has a very vast array of mortgage options, in certain situations, customers could negotiate better rates.

Compare and get the best mortgage rates in Canada. Visit Best Mortgage Online website and find answers to your mortgage related queries.

Mortgage Refinance

When Is the Right Time to Refinance Your Mortgage in Canada

If you look at the latest state statistics, you can see that home-ownership has been rising in recent years. At the moment, nearly 3/4 of families in the country have a fixed mortgage rate.

With prices of homes soring, many people have to build up equity in their homes. However, they still may feel they’re cash-squeezed. If that is the case for you, refinancing your mortgage may be an excellent strategy to lower the total monthly payments.

But is it the right time for you to refinance your mortgage? That’s what we’re going to try and answer.

The Basics of Mortgage Refinancing in Canada

If you’re like most Canadians, your existing mortgage is on a closed, five-year term and of a variable rate. That means that the interest on your loan is not fixed for the duration of the borrowing period. Instead, it’s subject to changes in market trends, and at times, this could result in higher monthly payments.

At the same time, if you have a five-year closed mortgage at 3%, today, it might be worth refinancing into a new loan that is also for five years but has an interest rate of just 2%. That’s because your existing equity in your home could qualify you for a lower interest rate on your next mortgage.

By refinancing your current mortgage, you could lower your monthly payment by as much as 20% or even 25%. You can also take advantage of an offer to agree to a fixed interest rate for the next five years.

Many Canadians are refinancing their mortgages simply because they feel this is the best time. As a result, interest rates are rising, but not enough to offset all of your savings.

If you’re thinking about refinancing your mortgage, perhaps these tips might help you decide when is the right time for you to refinance.

When To Refinance Mortgage When Interest is Rising

One of the best times to refinance your current mortgage is when interest rates rise. You might even be able to secure a better interest rate on your new mortgage as well as lower monthly payments if you have equity in your home.

In many cases, those who completed a refinance at the right time didn’t take no for an answer from lenders during their initial attempt.

Another thing to keep in mind is that it will take at least three weeks to approve the new loan. Then you’ll need to get your documents in order, including a copy of your existing mortgage, title search and other financial information needed by your lender to process your application.

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When To Refinance Mortgage When Interest is Going Down

People who refinance their existing mortgage when the interest rate is going down may not see as many savings as they would if rates were rising, but they could still save $100s or $1,000s over the life of your loan. You can then use that money for other financial goals that will reap future rewards, like perhaps using it to pay off credit card debt.

The other thing to consider is that you don’t have to wait until interest rates are higher before refinancing your loan because if you do, you could end up paying more interest over the term of your new mortgage. So, for example, even if interest rates fall by 2%, there might be little incentive for you to refinance your loan.

However, if you can lower your monthly payments by $200 or $300, then it’s probably worth looking into refinancing your mortgage, even if that means you will be locking yourself into a low-interest rate for the next 5 to 10 years. Or perhaps take out another line of credit using the equity in your home as collateral.

When To Refinance Mortgage When Interest is Stable

Another time when you might consider refinancing your existing mortgage is when interest rates are stable. That could make sense because with rates remaining the same, there wouldn’t be any penalty attached to closing out an existing mortgage contract and taking on a new one should interest rates decrease further still, something which seems inevitable at this time.

Another advantage of refinancing during this period is that you might be able to replace your current fixed-rate mortgage with a floating rate. That means your monthly payment could become even less expensive if rates drop further over the next few years as expected. However, if interest rates increase, it shouldn’t have as much of an impact on your loan since you will now have a floating rate attached to your new mortgage.

Most mortgages in Canada are now either variable or adjustable-rate mortgages because homeowners feel these loans offer greater flexibility and affordability. In a rising interest rate environment, especially where money becomes more expensive to borrow, these flexible loans can help mitigate the worst effects that higher rates can cause to home budgets.

Of course, if you do decide to refinance your existing mortgage when rates are going up or down, you’ll need to make sure that the new rate is a fixed one because variable rates can fluctuate dramatically and even go up as high as prime plus 9.0%.

What You Should Know Before Refinancing Your Mortgage

Another thing to keep in mind is that refinancing your mortgage could mean an increase in your monthly payment even if you’re getting a better rate. Why? Because some lenders may also require you to pay for the appraisal, title search and other legal fees associated with closing out an existing loan contract.

Before you refinance your current mortgage, it’s worth doing some research first by getting quotes from different lenders so you can find out how much money you could potentially save by refinancing. This way, there won’t be any surprises when borrowers receive their final quote following their application process or lock-in period, which typically lasts between 30 days and six months. During that time, they cannot switch lenders without paying fees.

Closing Thoughts

With more extended amortization periods now being offered by some mortgage lenders, refinancing your existing home loan may well become an even more attractive strategy today. That is especially true now that interest rates are so low and likely to remain this way for the foreseeable future.

If you do decide to refinance your mortgage, make sure before signing on the dotted line that you’re aware of all the terms and conditions involved with closing out your current loan contract in addition to any other fees that may be associated with this transaction.

You can get in touch with our Mortgage experts for loan rates and advice. We also have more articles covering different aspects of Mortgage in Canada available at Best Mortgage Online for your reference.

New Purchase Mortgage

Mortgage Down Payment in Canada: Everything You Need to Know

If you’re reading this, you’ve probably come across the news that prices of down payments in Canadian cities have skyrocketed over the past year. As CTV News reports, in 2021, housing affordability has worsened by the widest margin in nearly 30 years.

But despite all of this, many Canadians are still out there buying properties. Whether you’re buying your first home or owning multiple properties, you know that the buying process starts with saving for a down payment. 

To help you start, here’s everything you need to know about down payments in Canada.

How Minimum Down Payment Works in Canada

When a down payment is mentioned, people usually think of the minimum amount you must pay as a deposit. However, the term mortgage down payment covers different deposits with varying credit conditions.

The Loan-to-Value Ratio (LTV) is how much of your home’s price is paid by the mortgage. Most mortgage lenders use this insurance to keep themselves safe even when they don’t have collateral.

The minimum mortgage down payment in Canada ranges from 0% to 20%. In addition, all high-ratio mortgages require mortgage default insurance, which protects against losses in case of borrower default, death, or disability.  

The amount you put down will affect the mortgage rate and mortgage payment. For example, if you put down a mortgage down payment of less than 20%, there will be mortgage insurance fees.

The mortgage insurance premium is payable to the mortgage insurer, the Canada Mortgage and Housing Corporation (CMHC), or Genworth Financial Canada Ltd. This amount is usually included in your monthly mortgage payment. Exclusions from mortgage insurance include:

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Different Types of Minimum Down Payments

Though mortgage down payment is usually used interchangeably with mortgage insurance, there are also different types of mortgage down payments.

Cash Committed Mortgages

If you need a mortgage loan but don’t have the minimum 20% mortgage down payment, your mortgage advisor can help you get a cash-committed mortgage loan. A cash-committed mortgage loan requires mortgage insurance because the loan amounts are greater than 80% of the property’s value.

A cash-committed mortgage loan requires mortgage insurance because the loan amounts are greater than 80% of the property’s value.

Lender Mortgage Insurance (LMI)

If you plan to borrow more than 80% of your home’s price and can’t meet mortgage down payment requirements, it will be an interest-only mortgage with mortgage default insurance. That means mortgage insurance premiums must be paid with interest charges until the mortgage is paid off, or mortgage down payment can be increased to 20% or more of the home’s value.

CMHC Mortgage Loan Insurance Premium (CMHC MIP)

If you need mortgage financing and cannot make a minimum 5% mortgage down payment, you can apply for mortgage loan insurance with the Canada Mortgage and Housing Corporation (CMHC. The CMHC mortgage loan insurance premium is payable to mortgage default insurance.

National Housing Act Mortgage Loan Insurance Premium (NHA MIP)

The National Housing Act mortgage loan insurance premium is payable to mortgage insurer Genworth Financial Canada Ltd., on mortgage loans with mortgage rates more than the mortgage down payment.

Mortgage Loan Insurance Premium (MIP)

The Canada Housing and Mortgage Corporation (CHMC), a mortgage insurer under the National Housing Act, operates as Canada Guarantee. This mortgage insurance premium is payable to mortgage insurer Genworth Financial Canada Ltd., on mortgage loans with mortgage rates more than the mortgage down payment.

How Much Mortgage Down Payment Do I Need?

You don’t need to pay a 20% mortgage down payment to get a mortgage loan, but you must avoid borrowing more than 80% of your home’s value. You can calculate this by taking your property value and subtracting the mortgage down payment.

Different mortgage lenders have different mortgage rates and insurance premiums for mortgage down payments. You can lower your monthly mortgage rate by making mortgage down payments of more than 5% of the home’s value, e.g., 10%, 15% or 20%.

Time You Need to Save Up for a Down Payment

You need to consider how much time you need to save up for a down payment. Luckily, the National Bank of Canada recently released a report outlining how much time people need to save money to make the first down payment. 

If you saved 10% of your pre-tax household income, it would take you slightly under six years – or 69 months – enough to save for a down payment on a typical Canadian home. As at this time last year, there had been 57 months of saving at the same rate.

Putting away 10% of your household’s pre-tax income may take decades in Vancouver, Victoria, and Toronto.

Average Down Payments by Province

Next, you need to realize that your down payment vastly varies from province to province. That can help you determine how much money you’ll need for a down payment on a house in your area based on the average price of homes in your area. 

Here are the average don payments in Canadian provinces, according to the latest Real Estate & Housing Market Forecast report:

  • British Columbia: The average down payment in British Columbia is $159,762.64, or 22.5% of the purchase price of a property.
  • Ontario: Ontario homebuyers, on average, make a larger down payment than residents of any other province (aside from British Columbia). 
  • Quebec: According to first-quarter data, Quebec residents made the smallest down payment on a home, with an average of less than 15%.
  • Alberta: The average down payment in Alberta was $62,929.45, making it the second-lowest in the test markets, behind only Quebec’s 15.15 percent.
  • Nova Scotia: The average down payment in Nova Scotia is 18.54 percent ($57,781.46), the lowest among the test markets at $363,330.

Closing Thoughts

The mortgage down payment is the cash a home buyer needs to pay as a deposit on a mortgage. Mortgage insurance reduces this for buyers who can’t complete a down payment. Depending on mortgage rates and insurance premiums, you can calculate mortgage down payments in Canada.

Let us at Best Mortgage Online help you find the best loan rates to assist you in your home purchasing process. Contact us via the button below.

Mortgage Renewal/Switch

Will Your Mortgage Renew Automatically in Canada?

Will Your Mortgage Renew Automatically in Canada?

In Canada, when a borrower takes out a mortgage loan to purchase a property, the loan is typically secured by a written agreement called a “Mortgage.” The borrower agrees to repay the mortgage using monthly payments consisting of interest and principal. The period used for repayment of principal is referred to as the term.

In most cases, borrowers will sign a mortgage for a term of 5 to 25 years. However, once the borrower has paid down the principal to 80% of the property’s original value, he may be able to renegotiate his loan with his lending institution to obtain lower monthly payments.

What Does Mortgage Renewal Mean?

Renewing a mortgage means that the borrower will take out another written agreement with the lending institution, paying off the original loan and signing up for a new term to pay down the principal. Each time this is done, borrowers may be charged fees to obtain their new mortgage.

When Does Mortgage Renewal Occur?

When you renew your mortgage depends on whether or not it has an automatic renewal clause or “option.” At least 30 days before the expiry of your current mortgage, you should receive notification from your lending institution regarding its renewal policy. Borrowers are typically informed if their mortgages will automatically renew subject to certain conditions. These conditions include:

  • The property value increases;
  • The creditworthiness of the borrower;
  • The property type; and,
  • Changes in market conditions.

Suppose your lender does not include an automatic renewal clause in its mortgage agreements. In that case, borrowers are required to make arrangements with their lending institution before the expiry date of their mortgages to obtain new loan terms. Failure to do so may result in a default on the original agreement.

Borrowers who fail to pay their outstanding debts will be subject to foreclosure proceedings by their lenders. They will also lose any accumulated equity in the property, which generally reverts to the lending institution.

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What Happens When Your Mortgage Expires?

If you have a fixed-rate term with no options or renewals attached, your mortgage will expire at maturity. That means that your lender cannot ask you to renew or extend the term of your agreement, and for this reason, a fixed-rate mortgage is a good choice if you think that you might want to move from the property in question before the end of the term.

When Does Your Mortgage Renew Automatically?

During the fixed-rate term of your mortgage, you may wonder what will happen to your rate and monthly payments if they aren’t changed when your agreement expires. That is a good question and one that your lender’s automatic renewal clause can answer.

When Does Your Mortgage Not Renew Automatically?

Most mortgages contain an automatic renewal clause with terms that range from six months to five years. The length of time will vary depending on the type of property involved, how much has been paid off on the existing loan, the borrower’s creditworthiness, and market conditions.

For example, borrowers with “substantial equity” in their homes may have a renewal term of 10 years, while those with no equity usually have to renew for five. With this being said, the bank will not provide a more extended renewal option than the borrower needs or wants.

Borrowers who want a definite expiry date can choose a five-year option and then renegotiate the terms of their loans at maturity. Those who prefer to pay off their mortgages earlier can opt for shorter terms, such as 18 months or two years.

What Happens During Your Mortgage Renewal?

Once your mortgage has been automatically renewed, you will be required to sign another agreement with your lending institution. This document will list all of the original loan details along with the new interest rate, repayment date, amortization period, and other information.

The bank will not automatically save you money on your new rates or terms. To receive the best possible renewal package from your lender, you must call the institution during this time to negotiate a more competitive interest rate and term.

Let’s say that your mortgage is renewed at a higher rate than that on the original agreement. Then, it may be possible for you to refinance with another financial institution within a short period following its expiration. 

That particular strategy may spare you some of the higher associated costs involved with breaking before maturity, as well as those incurred from being charged an early termination fee by your current lending institution.

How Can Your Mortgage Renew Automatically in Canada?

If you need a new mortgage, consider how it will renew automatically in Canada. Some lenders offer personalized renewal terms tailored to your specific requirements. These may include:

  • The ability to lock in interest rates;
  • Mortgage renewal guarantees; and,
  • Loans with flexible terms.   

Pros and Cons of Automatic Mortgage Renewal

There are advantages and disadvantages for borrowers who choose to have their mortgages automatically renewed. For example, suppose you are out of the country or plan on moving far away from your property before the end of your fixed-rate term. In that case, automatic renewal may be beneficial because it reduces one more element that could prevent you from renewing.

On the other hand, if you expect rates to fall over the next few years, it might make sense for you not to renew your mortgage but instead opt for a shorter term to take advantage of lower interest rates. In this case, opting out of automatic renewal will give your lender less bargaining power when terms with you at renewal time.

The Bottom Line On Automatic Mortgage Renewal

Keep in mind that there may be a cost involved with breaking your mortgage agreement before maturity, even if your lender does not renew it automatically. However, you can avoid this expense by calling your lender before the automatic renewal date and negotiating a better deal.

If you are looking to acquire home loans, more information on Mortgage in Canada, loan rates in states of Canada, etc. let Best Mortgage Online help you.

Mortgage Refinance

Three Important Aspects to Look at Before Refinancing

Are you a mortgage holder and looking to make changes to the original loan? Refinancing should be the answer. This approach gives you the flexibility to take charge of your mortgage while adding instant funds into your budget. 

Homeowners can use the new loan to lower the interest rates, pay off the mortgages quickly, and turn home equity into cash. However, make sure that you switch to the appropriate loan to make the most of refinancing. 

Understanding the process thoroughly might help you know whether switching to a new loan is the right decision or not. There are multiple factors you need to keep in mind while refinancing, here’s the guide to the three most critical aspects every borrower must look at before adopting this approach. 

A brief overview of refinancing

Before jumping into the list of essential elements, it’s vital to learn more about refinancing to understand better. As the name suggests, refinancing replaces an existing debt obligation with another debt with new terms and conditions. 

This approach lets you swap out your old, higher interest rate for a new one with lower rates. The terms and conditions for refinancing are based on several economic factors and may vary from one country to another. 

For instance, you can refinance to borrow up to 80% of the value of your home in Canada. If your current mortgage is just 50% of your home’s value, you can refinance to borrow the remaining 30% to complete the mortgage loan amount to 80% of the home value. 

This approach is mainly adopted for three significant reasons: 

● To change your mortgage type

● To borrow more money

● To get a lower interest rate

3 major aspects to consider before refinancing

Now that you are well-acquainted with the refinancing concept, let’s unveil the three significant elements to consider before using this approach. Please read them carefully to avoid any last-minute surprises.

The Cost of Refinancing

Refinancing isn’t free; hence, the borrowers must consider the cost before switching to the new loan. Depending on the loan, you have to pay various additional charges, including mortgage registration fees, legal fees, home appraisal fees, and more. The borrowers can avoid the mortgage discharge fee if they continue with the same lender. 

Additionally, if you refinance before your term is over and choose the same mortgage rate, you’ll be charged penalties. However, you can avoid them by blending and extending your mortgage rate that mixes your new rates with the existing ones. These fees can add up to hefty amounts depending on which fees apply to you while refinancing.

The Interest Rates

Refinancing your mortgage equals applying for a new loan; therefore, it is mandatory to look at the interest rates before making a switch. Unarguably, the most important reason for adopting this approach is to get a better interest rate. 

Hence, the borrowers should opt for refinancing if there is a considerable difference between the interest rates, making the whole process worthwhile. A difference of a few to some percentage points can make a big difference while saving tens of thousands of bucks in the overall repayments.

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Check Your Loan-To-Value Ratio

The loan-to-value (LTV) ratio is yet another critical factor to consider before refinancing your mortgage. This value mainly looks into how much money you take out to buy a home versus the home’s actual value. 

LTV is one of the primary ways lenders use to calculate the level of risk associated with the approval of your mortgage. Hence, the borrowers must present a better LTV ratio to get a loan faster. The more money you invest into the house, the more equity you have in it—also, the lower your LTV, the better the chances of securing good loan terms. 

As you pay off the mortgage, you build up equity in your home. This is the difference between the value of the property and the remaining balance of your mortgage. Your home equity will rise as you pay your mortgage. 

In Canada, you can refinance to borrow up to 80% of the home’s value. For instance, you owe a $200,000 mortgage on a $400,000 home. It means that your current loan-to-value ratio is 50%. Since you can only borrow up to 80% of your home, you can refinance to borrow an additional amount of $120,000 (30% of $400,000)

If you have two mortgages, you may also use a refinanced amount to consolidate the second mortgage with your first one. 

Other factors to keep in mind before refinancing

In addition to the elements listed above, there are a few more factors that you should consider before refinancing your mortgage. 

● Check if your credit rating is good enough

● Determine the good time to refinance 

● The primary reasons for switching to a new loan

● Know your Debt-To-Income (DTI) ratio. 

● Don’t forget the taxes

The Bottom Line

Refinancing your mortgage is a big decision; hence take ample time and conduct in-depth research before making a switch. A mortgage refinance is best suited to homeowners that home equity is looking to borrow a massive amount at a fixed rate. 

However, it might not be a good option for borrowers who need quick access to money or looking to borrow small amounts at a time. This approach comes with both pros and cons; therefore, you should keep all aspects in mind before transitioning from one loan to another. The decision is for you to make, so make it precise.

For more mortgage advice and loan rates, give us a call at 1-855-567-4898 (toll free) – Best Mortgage Online.

New Purchase Mortgage

How to Pick a Mortgage Lender in Canada: 10 Questions to Ask

If you’re a new homeowner, a mortgage is a huge commitment. Like any contract, it’s essential to know the details of what you are signing up for. After all, mortgage rates change frequently, and if you don’t know the particulars of the mortgage agreement, this can cost you money.

Understanding Mortgage in Canada

In Canada, there are a few different mortgage options:

  • Conventional mortgage: A mortgage that requires the borrower to make mortgage payments to repay the loan over time
  • High Ratio Mortgage: Type of mortgage that requires the borrower to make mortgage payments to repay the loan over time and requires the borrower to pay a monthly mortgage insurance premium.
  • Second/Third Mortgage: For one who has already signed another mortgage agreement with an institution.

The mortgage lender you use will significantly affect the mortgage rates and terms you receive. Here are some tips on choosing your mortgage provider:

  • Talk to family or trusted friends
  • Ask your real estate agent for recommendations
  • Shop around online through mortgage brokers in Canada
  • Decide if you want to go through a mortgage lender or a mortgage broker

What Makes a Good Mortgage Lender?

Your lender will be your single point of contact for the mortgage agreement as far as mortgage providers go.

You want to find someone who makes you comfortable throughout the mortgage process and is reliable. Some mortgage brokers offer competitive rates and products, while some lenders earn their money solely by originating mortgages.

Some mortgage lenders or brokers offer their mortgage insurance, while others link you with mortgage insurers. It is essential to know that mortgage rates can change quickly, so it’s vital to know if your mortgage provider will be able to match the best mortgage rates in Canada.

Identifying Your Mortgage Lender

The mortgage broker is a professional who helps people find a mortgage lender and helps them through the process of getting a mortgage.

Mortgage lenders can range from banks to credit unions and trust companies, among others. When it comes time for changes, you’ll want someone with experience when it comes time for changes, such as renewals or payment amount changes. During financial hardship, the last thing you need is an inability to make adjustments with your mortgage lender without incurring fees.

Typically, mortgage lenders will provide a mortgage broker with a mortgage rate and mortgage insurer, or they may give them a combination of both. As a result, the mortgage lender can offer conventional and high ratio mortgages.

A mortgage broker can help you find the best mortgage rates available in Canada, regardless of whether they’re from a bank, credit union, or mortgage insurer.

There are two types of mortgage brokers:

  • Sales-Based Mortgage Broker: A mortgage broker whose primary source of income is originating loans and collecting commission for doing so.
  • Non-Sales Based Mortgage Broker: A mortgage broker whose primary source of income is not originating loans and collecting commission for doing so.
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10 Questions You Need to Ask Your Mortgage Lender

Different lenders offer different mortgage plans with these options. Here are the top 10 questions to ask mortgage lenders in Canada before signing on any dotted line:

What is your mortgage rate?

This is an obvious question, but it gives you a rough idea of what kind of mortgage you can afford. If mortgage rates are low (less than 5%), then mortgage rates are usually lower too.

What is your mortgage penalty?  

This question will tell you what the lender charges if you need to break your mortgage agreement early or if mortgage rates drop below what you initially negotiated been. For example, some lenders charge an entire three-month interest while others only charge one month’s interest to break the mortgage agreement early. Failing to pay your mortgage penalty can also negatively affect your credit rating.

How will mortgage rates change over time?

Different mortgage lenders use different methods to calculate mortgage rates, so it’s essential to compare the mortgage terms of each lender. For example, some lenders offer “fixed” mortgages that don’t change for a set period, while other mortgage rates vary based on the prime rate or other lending rates.

What penalties do you charge if rates rise during my term?

The mortgage lender should be clear about whether they have a penalty for your mortgage rising in interest before it expires. This way, you’ll be able to make an informed choice about mortgage rates.

How often is my mortgage interest rate reviewed?

Some mortgage lenders will review mortgage rates every month, while others only review mortgage rates every 3-5 years. You should know how often your mortgage will be reviewed to avoid higher mortgage rates when you renew your mortgage agreement.

Can I lock my interest rate for a set period?

Most mortgage lenders will offer you the chance to “lock in” mortgage rates before they change. That is great if you’re planning to buy a house and want to know your mortgage costs, but it also helps prevent mortgage rates from increasing.

How much do mortgage payments increase over time?

Depending on the mortgage lender, mortgage rates can increase by 5% or more after a few years. So make sure you’re aware of how mortgage rates might change over time so that you’re not surprised later on.

Can I pay off my mortgage early?

Some mortgage lenders will let you pay off your mortgage early, but there’s usually a charge for this. If possible, try to find mortgage lenders who don’t charge early mortgage payment penalties.

What type of mortgage do you offer?

Different lenders offer different mortgage plans, so make sure the mortgage lender knows what kind of mortgage you’re looking for. For example, mortgage lenders might offer mortgage plans that allow you to pay off your mortgage early without penalty, and other mortgage rates might not provide this option.

Will I be charged mortgage application fees?

Most mortgage lenders will charge a mortgage application fee when applying for mortgages, but some mortgage lenders may also charge mortgage application fees when mortgage rates drop. This way, you’ll know what mortgage lenders will charge before you apply for a mortgage.

Closing Thoughts

Other mortgage lenders may offer other mortgage plans, so it’s crucial to shop around for mortgage rates until you find the best mortgage lender. Some mortgage lenders will charge a monthly mortgage administration fee and a mortgage penalty fee if your mortgage rate rises during your term.

Best Mortgage Online can also help you acquire a mortgage, refinance a mortgage in Canada, … with the best rates on the market. Call us and talk to our agents are available at 1-855-567-4898 (toll free).

Mortgage Refinance

Things to Know Before Refinancing Your Home Mortgage in Canada

Refinancing your mortgage is a typical move to make as interest rates change – which is probably the main reason. But it’s important to know what you’re getting into and whether the new mortgage is worth it before locking yourself in for another five or ten years.

Mortgage Refinancing explained

You’re essentially breaking your existing mortgage contract and replacing it with a new one when you refinance. You want to get a lower interest rate so you can pay less in monthly payments or have the same amount of money at your disposal each month, but without having to break the terms of your mortgage agreement.

Most people refinance their mortgages because interest rates are lower than their current mortgage rate.

There are different types of mortgages you can refinance. If you’re renewing your mortgage, it’s likely your term length is up, and you’re facing a penalty for changing lenders. Instead, look into refinancing so that you can stay with your current lender or try another one without penalty.

If you already have a pre-approved rate, this is the lowest interest rate and perhaps the only chance to get an even lower rate than what’s been previously offered. 

Your lender will ask for details about your income and savings to determine whether they’ll approve the new loan at that rate or not. It depends on individual circumstances such as employment status and credit history.

Top Reasons to Refinance a Mortgage in Canada

There are many benefits to refinancing your mortgage. For example, you can get a reduced interest rate or consolidate debt. The following list provides the top reasons why people refinance their mortgages:

  • Lower Interest Rate: This is one of the primary reasons anyone would consider refinancing a mortgage. Your lender will review your financial condition and present you with a lower interest rate if it’s warranted;
  • Debt Consolidation: If you’re trying to pay off debt and improve your finances, take out a new mortgage that combines all your old debts into one, so you only have to worry about one monthly payment at a lower interest rate;
  • Access Home Equity: When you refinance, you can access the equity that’s built up in your home over time. You can use it to do renovations or pay for college tuition;
  • Cash Out Equity: While this isn’t recommended unless you need the money since it puts your financial stability at risk, it is an option if you want to take out extra cash;
  • New Lender Relationship: You usually have better terms and conditions with a new lender than your existing mortgage.
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When is the Right Time to Refinance Your Mortgage?

Refinancing your mortgage is a big decision. You don’t want to rush into it without weighing the pros and cons of refinancing versus renewing your current mortgage.

If interest rates are lower than what you’re currently paying, that’s a good indication you should refinance. Likewise, suppose you have an adjustable-rate mortgage that rises with interest rates. In that case, this might be a time for you to consider refinancing as well since banks usually offer lower interest rates on variable mortgages when they adjust them from their highs.

Before signing on any new loans or taking out cash for any reason, make sure you can afford your loan contract’s new terms and conditions. It may seem appealing to consolidate debt or a reduced rate when interests are high, but you could risk becoming delinquent on your payments if interest rates ever go down and you can’t keep up with the new terms.

Can You Refinance Your Mortgage If You Have Bad Credit?

It’s not impossible to refinance a mortgage even when you have bad credit. That said, it won’t be easy as lenders would look at many factors, such as your debt-to-income ratio and capacity to repay the loan before they approve or deny loans.

If you want to refinance a mortgage with bad credit, start applying for personal unsecured loans. This way, your poor credit history will be tied up with other forms of non-mortgage debt that might not reflect poorly on you.

You may also need to find high-interest loans to pay off your old debts before you can consolidate them into a lower-interest loan. Doing this might not be an option for everyone, but if you have the means and it will help improve your credit score in time for refinancing, it’s something to consider.

How to Refinance Your Mortgage in Canada

Following a few tips can help you refinance your mortgage successfully. For example, shop around before accepting the first offer from a lender and be prepared to negotiate terms if possible.

Refinancing a mortgage is not an overnight process – it can take up to six months for lenders to review your application and approve or deny your request for refinancing. As such, careful planning ahead of time will help the process move as smoothly as possible.

When refinancing a mortgage in Canada, you’ll need proof that there won’t be any gaps in your payments due to switching lenders. However, since most people make changes to their mortgages when they renew their loans, this isn’t usually a problem because you’ll have automatic payment withdrawals set up with your new lender by then.

However, if you’re switching lenders outside of renewal season or are coming to the end of your mortgage term, you’ll need to prove that you have other forms of income if there’s a problem with getting automatic payments set up.

If you don’t show proof that your credit score will allow for an automatic payment plan, your lender might require upfront monthly installments until they can establish whether you can make the required payments on time each month. If your credit score is borderline and this option isn’t available through your current lender, refinancing might not be an option for you.

Improve Your Financial Situation Today!

After paying down your debts, ask your existing lender about the chances of getting a reduced interest rate or being approved for a refinance without excellent credit. You may have to shop around for an alternate lender first and then reapply with your current mortgage company once you’ve paid down other debt and improved your financial situation by other means, such as building savings.

Explore Best Mortgage Online for more mortgage topics. You can reach us at 1-855-567-4898 (toll free) for more mortgage advice and get to know the best loan rates on the market at the moment.

Home Equity Takeout

How to Tap Into Your Home Equity Safely

There are times when people need access to cash in a hurry. For example, emergencies happen, or you want to buy something expensive. One way of accessing the money you have tied up in equity in your home is by tapping into home equity, also known as “taking out a second mortgage.”

There are several ways to tap into your home’s equity to get a specific amount of cash. But tapping into your home equity also comes with significant risk. Because you are selling a portion of your home, it’s best not to take out any second mortgage that you can’t afford or that will put your family in financial straits.

Cash-Out Refinancing

If you decide to cash in on your home equity, you might want to refinance the whole amount of equity and use it for something else. That is called cash-out refinancing. For example, let’s say your home is worth $175,000, and the total loan on the house is $125,000. If you owe $100,000 and you refinance with a new loan for $145,000 ($115,000 borrowed), then you have just cashed out $25,000 ($145k – $100k), or 25% (100/175), of your equity.

If that sounds like an easy way to some money – and we do mean easy – watch out. Before you go through with a cash-out refinancing deal, there are several things to consider, including the interest rate and monthly payments.

In general, it’s best not to borrow against your home unless you indeed need the money. On the other hand, some people would rather have a second mortgage or cash-out refinance because they can get a lower interest rate than an unsecured loan. If going this route makes sense for you, talk to your lender about getting a new loan and making your new monthly payment manageable.

Refinancing from Another Lender

In this case, you borrow money from another lender to pay off your present loan or to get a larger loan that will cover the cash-out refinance. With a refinancing loan, you take out a new loan for one amount and use it to pay off another existing debt. By doing this, you have just used the value of your home as security for the new debt. Before applying for any refinancing loan, make sure that you can afford the monthly payments on both loans after they are consolidated into one payment.

With either second mortgages or cash-out refinancing deals, lenders offer what is called a home equity line of credit secured by your home’s equity. If you don’t need the money for a while, you can keep the credit line open and available for future use. But be careful not to spend too much of the limit, or it could affect your ability to come up with the monthly payment on loans or credit lines that make use of this equity line.

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Home Equity Loans

A home equity loan is an amount borrowed against your home’s equity in one lump sum. You borrow money from a bank or other lending institution and pay interest on the total amount until it is paid off. Unlike a second mortgage, where you get all of this money at once, most lenders give you just part of what you need right away and then continue to supply you with periodic loan disbursements until they provide you with everything that was approved.

You’ll usually have a fixed amount of time to pay off the loan. However, interest rates on home equity loans are typically adjustable, meaning they can change from one period to another. That is an essential consideration because it could affect your monthly payment and total interest paid over the life of the loan.

In most cases, lenders require homeowners to have no other mortgages on their homes when they apply for a home equity line of credit or home equity loan. However, some lenders may allow homeowners with existing mortgages to consolidate them into their new debt, but this will vary according to their discretion.

That means that you should be debt-free before you begin applying for these kinds of loans, although some lenders may allow you to have a second mortgage and still get a home equity loan.

Caveats About Home Equity Loans

Homeowners should not borrow against their homes just because the interest rate on a home equity loan is lower than other types of lenders, especially if they are in danger of not paying it back. The lower interest rate can be deceiving because, after all, you are putting your home up for collateral when you obtain this type of loan. 

If you cannot afford the monthly payment or do not want to risk losing your house, don’t take out a home equity loan or line of credit, no matter how low the interest rate might seem.

Is Home Equity Loan the Best Solution For You?

If you think a home equity loan is the best solution for your situation, continue to investigate all of your choices and find out what types of rates and terms are available before you apply. Talk to several lenders to see what they have to offer. When shopping around, ask about fees as well as interest rates. Make sure that you:

  1. Fully understand the fee structure
  2. Know how much it will cost if you miss payments or default on the loan
  3. Know how those costs increase over time.

Also, check into whether your property taxes will be included in any refinancing agreement and find out what happens if they go up during the loan term. If possible, make sure that there will be no penalty if you pay your property taxes out-of-pocket.

Understanding Home Equity Loans

Since interest rates on home equity loans typically rise and fall with the prime rate, it’s not a good idea to take one of these loans unless you have no other options. However, even though some pitfalls could pose problems – such as accrued penalties for paying off early or refinancing without penalty – sometimes a home equity loan or line of credit is the only way to go.

For example, suppose you need money for necessary repairs that will not be covered by insurance or disaster relief money. In that case, this may be your only option short of cashing in all your investments and retirement accounts.

Finally, don’t assume that you won’t obtain a home equity loan or line of credit because real estate values are down. While lenders may be reluctant to issue new loans, they might still be willing to work with you if you already own your home and can provide proof of income.

We – Best Mortgage Online – can help you find the best Loan Rates in Canada and provide you with mortgage advice, consultant. Contact us via here or make a call to 1-855-567-4898 (toll free).

Mortgage Refinance Mortgage Renewal/Switch

Difference Between Mortgage Refinance versus Mortgage Renewal

When it comes to mortgages, there are many details involved. Mortgage in Canada allows Canadians to own landed properties despite not having the complete fund for the properties. A mortgage is a loan service on properties, which people have enjoyed over the years. Mortgage refinance and mortgage renewal is well-known mortgage terms in the mortgage business. These two concepts are used interchangeably but are different in operation.

Mortgage renewal is more short-term, while mortgage refinance is extensive. Therefore, to correctly identify the difference between both, this article will discuss the details of mortgage refinance and renewal. Then, we will assess the differences in their operation. But first, let us begin with a definition of both.

What is Mortgage Renewal?

In simple terms, Mortgage renewal refers to extending the details of an existing loan. So, mortgage renewal is the act of negotiating the terms and conditions of a current loan contract, especially after the loan’s maturity. When a mortgage matures and you do not have the funds to pay it off, you can choose to renew the mortgage. This can be done based on the existing agreement. The contract would then be renewed for another period, thereby setting another maturity date.

What is Mortgage Refinance?

On the other hand, mortgage refinance refers to a total overhaul of the loan details, unlike mortgage renewal, which simply extends the existing mortgage contract. Mortgage Refinance is the replacement of the existing loan details with a new one. This happens after the maturity of the mortgage; you then renegotiate with the lender to create another mortgage with new details if you are unable to pay off the debt.

Differences between Mortgage Renewal and Refinance

Before we assess the differences between the two concepts, let us first identify the few similarities between them. There are not many similarities between renewal and refinance. The situation that leads to either of the mortgages can be compared for similarities. Mortgage renewal and refinance can only happen at the maturity of the loan. If a loan does not expire or mature, there is no need to renew or even create a new loan detail. Also, mortgage renewal and refinance do the same job of maintaining the existing contract of the loan.

Despite this, there are various situations that you might need to renew or refinance a loan. But in all, it depends on the condition of the individual. 

Here are some differences between a mortgage renewal and a mortgage refinance.

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Type of Loan

The mortgage renewal and mortgage refinance both have different types of loans. Often mortgage renewal is applicable for short-term loans, loans that last one to two years with interest. These types of loans are known as open-ended loans. These loans are easily adjusted and include payment of interest. These loans are short-term, lasting between one to two years of maturity. Some of the types of loans that can be renewed are time notes, letters of credit, lines of credit. The details of these loans, such as the interest rate, the credit limit, do not change. The only thing that changes is the maturity time. A maturity time of about one year is often agreed upon.

While mortgage refinances are typically for close-ended loans. These loans are often longer and include amortizing loans, vehicle loans, commercial mortgages, and the likes. In this case, the lender does not renew the existing loan but replaces it with another.

Details of the Loan

Another primary difference between mortgage renewal and refinance is the mortgage details. However, both of them can be done in a way that the details of the loan, such as the credit limit, maturity date, and interest, can remain the same as the previous loan. But oftentimes, the details of the mortgage refinance are different from the previous loan it replaced. The lender renegotiates a maturity period with the borrower as well as a new interest rate.

Therefore, a mortgage refinance involves a complete replacement of the loan after the initial one has matured.  

Bank and Borrower

For a mortgage renewal, the bank or lender often approaches the borrower. While for a mortgage refinance, the borrower is usually the one who approaches the lender.

When the maturity period of the initial loan is almost up, the bank often contacts the borrower to give them options they can take. The borrower is informed that they need to pay the loan in full or submit their financial details for review. After their financial information is reviewed, the lender will now notify the borrower if they can renew their loan or not.

While for a mortgage refinance, the borrower approaches the lender. In this instance, the borrower contacts the lender to create a new loan. This contact can be with the current lender or an entirely new lender. The refinance process is simply like starting a new loan. You would have to file all required financial documents and supporting documents to the lender.


In summary, there are similarities between mortgage renewal and mortgage refinance. Although there still exist stark differences between both of them. The similarities often end in a way that they both occur after the maturity of a loan and the maintenance of the details of the existing loan.

But in terms of differences, they vary from the type of loans, open-ended to close-ended loans. Even the details of the loans differ from each other. The process of applying for each differ, as discussed above. Therefore, we can state that each has its usefulness and need in each situation from the above discussed. Applying for a refinance is best when a client cannot extend a loan but ensure that you get a mortgage. Although, this might be with a new lender and with new details.

These are the main differences between a mortgage renewal and refinance. So, when your mortgage is about to mature, you know the options available to you. And you also know the best option available to you based on your situation.

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