I'm Theeban Pathmanathan, Mortgage Agent Level 2 with FIN Mortgage – Dominion Lending Centres, and I help homeowners across Toronto, Scarborough, Markham, Pickering, Ajax, Whitby and Oshawa refinance with a clear plan.
Who refinancing is for
- Homeowners carrying credit card, line of credit or car loan balances who want one manageable payment.
- Families planning a renovation, an addition or a basement suite.
- Investors taking equity out to put toward another property.
- Business owners who need capital and prefer to use home equity.
- Couples going through a separation where one person is buying out the other.
- Anyone whose payments feel too tight and who wants to restructure the amortization.
- Borrowers with a B or private mortgage who are ready to move back to a traditional lender.
How a mortgage refinance works
When you refinance, your current mortgage is paid out and replaced by a new one. The new mortgage can be with your current lender or a different one. The difference between what you owe and the new loan amount (after costs) is your equity take-out. Your lawyer can pay other debts off directly, and you choose a new term, rate type and amortization.
The 80% limit
For a standard refinance with a prime lender, you can borrow up to 80% of your home's appraised value, minus what you currently owe. For example, on a home appraised at $900,000, the maximum total mortgage would be $720,000. If you owe $450,000, you could potentially access up to $270,000 before costs. The refinance calculator gives you a quick estimate.
Qualifying
Refinances are not insured, so lenders qualify you under the stress test at the greater of your contract rate plus 2% or 5.25%. Banks and other federally regulated lenders follow OSFI's B-20 guideline. If your income or credit doesn't fit, alternative (B) lenders and private lenders may offer more flexibility.
Costs to plan for
- A prepayment penalty if you break your mortgage before the end of your term (often the bigger cost, so we'll get the exact figure from your lender)
- An appraisal
- Legal fees for the new mortgage registration
- Possible discharge fees from your current lender
Some lenders cover part of the legal or appraisal costs; others do not. Sometimes it makes more sense to wait until renewal, add a HELOC or take a second mortgage instead. I'll compare all of these with you honestly.
Documents you'll need
- Photo ID
- Your current mortgage statement and a payout statement from your lender (it shows the penalty and discharge fees)
- Your most recent property tax bill
- Income documents: pay stubs and an employment letter, or two years of T1 Generals and Notices of Assessment if you're self-employed
- Statements for any debts you're consolidating
- Home insurance details, plus condo fee details if applicable
The process with Theeban
- Free consultation. We talk about why you're refinancing and what you want your monthly budget to look like.
- Run the numbers. I estimate your available equity, your penalty and the real cost of the refinance against the savings.
- Shop 50+ lenders. I compare banks, credit unions, monoline lenders and, if needed, alternative and private lenders.
- Appraisal and approval. I order the appraisal and package your file for the best fit.
- Close with confidence. Your lawyer pays out your old mortgage and any debts you're consolidating, and I stay in touch after closing.
Common refinance scenarios
- Debt consolidation: rolling high-interest debts into your mortgage to lower your total monthly payments.
- Renovation funding for a kitchen, roof or legal secondary suite.
- Down payment on an investment property using equity in your home.
- Spousal buyout after a separation.
- Restructuring payments with a longer amortization to free up cash flow.
- Self-employed homeowners who need a lender that understands business income. See refinancing for self-employed homeowners.
A local Toronto and Durham angle
Many homeowners in Scarborough, Markham and across Durham bought years ago and have built meaningful equity as the GTA market has grown. Durham in particular has a lot of detached homes with room for basement suites, which makes renovation refinances a common conversation in Pickering, Ajax, Whitby and Oshawa. In Toronto, condo owners need to watch how their building and condo fees affect lending. With offices in Toronto and Pickering, I can meet you locally, including evenings and weekends.
Is refinancing right for you?
Refinancing isn't always the answer. If your penalty is high or your renewal is close, waiting could save you money: we can plan the refinance for your maturity date and secure a rate hold in the meantime (see renew or switch your mortgage). If you only need occasional access to funds, a HELOC or second mortgage might fit better. My job is to show you the options side by side so you can make the call with confidence.
What makes a refinance worth it
A good refinance should leave you better off over the long run, not just this month. Before you commit, we'll look at three things together: the total cost to break your current mortgage, the interest you'll save by paying down higher-rate debt, and how the new amortization affects what you pay over time. The debt consolidation calculator compares your current monthly debt payments with a single mortgage payment.
Consolidating means securing that debt against your home and repaying it over a longer period, so it works best with a clear budget and a plan to keep cards paid off afterwards. If it lowers your monthly payments, I'll also show you how to use the breathing room to pay down your mortgage faster through prepayment privileges. For most residential refinances with qualified borrowers, there's no fee to you, because the lender pays my compensation.
Frequently asked questions
How much equity can I take out of my home?
With a prime lender, up to 80% of your home's appraised value, minus your current mortgage balance and costs.
Will I pay a penalty to refinance?
If you break your mortgage before the end of the term, usually yes. I'll get the exact penalty from your lender before you decide.
Do I have to pass the stress test to refinance?
Yes, with prime lenders. You qualify at the greater of your contract rate plus 2% or 5.25%.
Can I refinance if I'm self-employed?
Yes. Depending on how you report income, we can use traditional lenders, stated-income programs with B lenders, or private lending.
Is a refinance better than a HELOC or second mortgage?
It depends on your penalty, your timing and how you'll use the funds. I'll compare all three with you.
Does refinancing to consolidate debt hurt my credit?
The application involves a credit check, which can have a small, temporary effect. Paying off high-interest balances can help over time, as long as the cards and lines of credit are not run back up.
How long does a refinance take?
Often a few weeks from application to closing, depending on the appraisal, the lender and your lawyer.
This page is general information only and is not financial, legal or tax advice. All mortgages are subject to lender approval and qualification (O.A.C.). Rates, terms, programs and government rules change from time to time, so please speak with me about your own situation. Calculator results are estimates only and do not constitute a mortgage approval or offer. Theeban Pathmanathan, Mortgage Agent Level 2 (licence M14000189), FIN Mortgage – Dominion Lending Centres, brokerage licence #12825, independently owned and operated. Licensed by the Financial Services Regulatory Authority of Ontario (FSRA).