Refinancing changes or replaces an existing mortgage, often to access equity or alter repayment. Available equity is only one part of approval; income, debts, credit, property value and costs also matter.
Equity is a starting point
A conventional refinance may allow total secured borrowing up to 80% of your home’s appraised value. Existing secured debt reduces what remains. Income, credit and lender requirements still matter.
Compare the complete cost
Your current lender may charge a prepayment penalty. Appraisal, legal, discharge and other fees can change the outcome. Request a written payout statement and compare costs against the benefit you expect.
A lower payment is not always a lower cost
Extending repayment can reduce the monthly amount while increasing total interest. Consolidating unsecured debt into a mortgage also secures it against your home. We help you weigh those tradeoffs and plan repayment.
Work from net proceeds, not headline equity
Illustration only: at an assumed $800,000 property value, an 80% borrowing limit is $640,000. Subtracting $500,000 of secured balances leaves $140,000 before fees and lender assessment. If estimated transaction costs are $10,000, the remaining amount is $130,000. This is arithmetic, not an offer or appraisal; borrowing limits can differ.
Ask for a written payout statement
Find out the payout amount for your intended date, including any prepayment penalty, accrued interest, discharge expenses or repayment of incentives. An online estimate cannot replace the lender’s statement. Check whether other debts are covered by the registered charge.
Debt consolidation changes the risk
Moving unsecured debt into a mortgage places that borrowing against your home. A smaller payment can result from repaying over more years, with more total interest. Compare a budget and repayment plan alongside the new payment, and consider what happens if the original debts build up again.
| Question | Why it matters |
|---|---|
| How much cash is left after costs? | Fees and existing secured debts reduce proceeds. |
| What happens to total interest? | Extending repayment may outweigh a lower payment. |
| Could waiting until renewal help? | Timing can affect penalties and available alternatives. |
Questions to bring to your mortgage conversation
Can I refinance based only on home equity?
No. The lender also assesses your circumstances and property. Equity is not proof that the proposed payments are affordable.
Should I use a refinance or a HELOC?
Compare repayment structure, flexibility, costs and discipline required. The appropriate option depends on your needs and lender approval.
How does this apply to your plans?
No obligation. A personal conversation with Tajwar.
Further reading: FCAC: Borrowing against home equity
General information, not a commitment to lend. Mortgage eligibility, costs and terms depend on your circumstances and the lender.