With the sharp drop in interest rates, more and more homeowners are considering mortgage refinancing. Is it the right time to renegotiate your loan? Mylène Grenier, a Multi-Prêts mortgage broker, recently shared her perspective in an article in Protégez-Vous.
Real savings for some
A reduced interest rate can represent significant savings. For example, a one-percentage-point decrease on a $300,000 balance can free up about $2,000 per year over five years. Depending on early repayment fees, the move can therefore be worthwhile, especially if certain costs are covered by the new lending institution.
More than just a question of rates
Refinancing also means accessing other options: extending the amortization period to reduce monthly payments, or borrowing up to 80% of your property’s value to finance renovations or pay off high-interest debt. These choices offer flexibility but extend the length of the loan.
Doing the right calculations
Every situation is different. The right time to refinance depends on several factors: your current rate, potential penalties, your plans, and your budget. A mortgage broker can help you run the right calculations and explore the scenarios that apply to your situation.