How Much Equity Can You Pull?
[ Current Home Market Value ] x 80% = Maximum Allowable Total Debt
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( Subtract Existing Outstanding Mortgage Balance )
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[ Total Liquid Capital Available ]Core Drivers for Refinancing
- Debt Consolidation: High-interest credit cards, car loans, personal lines of credit, and tax arrears can be rolled directly into your mortgage. This restructures multiple obligations into a single payment at a lower interest rate, improving credit scores and increasing monthly net cash flow.
- Funding Major Life Milestones: Access low-cost funds to pay for post-secondary education tuition, assist children with a first-time home downpayment, or secure seed capital to launch a business.
Secondary Suite Rule — 90% LTV Extension
Homeowners can refinance up to 90% of their home's value if the extracted equity is explicitly used to build a legal secondary rental suite or accessory dwelling unit. This specialized insured refinance program features a 30-year amortization option with a minor premium surcharge. It is useful for creating multi-generational living configurations or establishing an independent rental income stream.
Prepayment Penalties: Weighing the Break Costs
- Variable Mortgages: Regulated to a flat, predictable penalty equal to 3 months of interest.
- Fixed Mortgages: Charged the greater of 3 months of interest or the Interest Rate Differential (IRD). The IRD compares your contract rate against current market rates for the remaining time on your term. If your contract rate is higher than current rates, the IRD penalty can be substantial.