"A mortgage refinance isn't just about getting a lower interest rate — it's about creating financial freedom and opportunities for your future. At Clover Mortgage, we help homeowners across Canada leverage their property's value to achieve their dreams, whether that's reducing monthly payments, accessing equity, or consolidating debt."
— Steven Tulman, President and Principal Broker at Clover Mortgage
Mortgage refinancing is the process of replacing your existing mortgage with a new loan, typically with different terms that better suit your current financial situation. This new loan pays off your current mortgage and establishes a new agreement between you and your lender.
Unlike a mortgage renewal, which simply continues your mortgage with the same lender when your term ends (potentially with a new rate), refinancing allows you to make significant changes to your mortgage structure, including:
In Canada, homeowners typically refinance when they want to take advantage of lower interest rates, need to access equity, or wish to adjust their loan terms to better align with their financial goals. With Clover Mortgage, the refinancing process becomes straightforward and tailored to your specific needs.
Since 2018, Clover Mortgage Brokers has provided personalized mortgage solutions to home buyers in Ontario and Calgary. Our commitment to each client goes beyond simply securing financing — we empower you to make informed decisions at every step, especially when considering a mortgage refinance in Toronto or elsewhere in Canada.
Refinancing your mortgage offers numerous advantages that could significantly improve your financial situation:
One of the most common reasons Canadians refinance is to secure a lower interest rate, which directly translates to reduced monthly mortgage payments. Even a 0.5% reduction in your rate can translate to thousands in savings over the life of your loan.
A cash-out refinance allows you to tap into the equity you've built in your home. This money can be used for:
Consolidating high-interest debts like credit cards, personal loans, or car loans into your mortgage can significantly reduce your overall interest payment and simplify your finances with just one monthly payment instead of multiple payments to different creditors.
Refinancing gives you the opportunity to switch from an adjustable rate mortgage (ARM) to a more stable fixed rate mortgage, or vice versa, depending on your risk tolerance and market conditions.
If your financial situation has improved, you might opt to refinance to a shorter loan term. While this might not lower your monthly payment, it will help you pay off your loan sooner and save money on interest over time.
If you've built up enough equity in your home (typically 20% or more), refinancing can help you eliminate private mortgage insurance (PMI), further reducing your monthly expenses.
Securing the best refinance rates is crucial to maximizing the benefits of your mortgage refinance. Current rates in Canada vary based on several factors, but understanding the landscape can help you make informed decisions.
Several elements influence the refinance rates available to you:
Rates subject to change without notice and are provided as examples only. Subject to credit approval and other qualifying factors. Your actual payment obligation may differ.
| TERMS | FIXED | VARIABLE | PRIVATE 1ST MORTGAGE | PRIVATE 2ND MORTGAGE |
|---|---|---|---|---|
| 5 Year | 3.89% | 4.04% | ||
| 4 Year | 3.99% | |||
| 3 Year | 3.79% | 4.15% | ||
| 2 Year | 4.19% | 7.99% | 9.99% | |
| 1 Year | 4.44% | 5.99% | 7.99% | |
| 7 Year | 4.34% | |||
| 10 Year | 5.24% |
At Clover Mortgage, our strong relationships with over 40 major banks and lenders enable us to offer over 300 different custom mortgage products, ensuring you get the most competitive mortgage refinance rates in Toronto and across Canada.
Apply NowTiming your refinance can significantly impact the benefits you receive. Here are key scenarios when refinancing makes the most sense:
When market rates drop significantly below your current rate (typically by at least 0.5-1%), refinancing can lead to substantial savings. Our refinance calculator can help you determine if the rate difference justifies the upfront costs.
If your credit score has increased substantially since you took out your original mortgage, you may now qualify for better rates, potentially saving you money regardless of market conditions.
When you've built significant equity in your home and need funds for major expenses, a cash-out refinance can be more cost-effective than high-interest loans or credit cards. This is particularly relevant in hot markets like Toronto, where property values have seen substantial growth.
Life changes such as a significant increase in income might make it feasible to switch to a shorter loan term, helping you build equity faster and save on interest over the life of the loan.
If you started with a variable rate mortgage but want more payment stability, refinancing to a fixed rate can eliminate the uncertainty of fluctuating rates. Conversely, if rates are dropping and you currently have a fixed rate, switching to a variable rate might save you money.
To determine if refinancing is financially worthwhile, calculate your break-even point—the time it takes for your monthly savings to offset the upfront costs of refinancing:
Break-Even Point = Total Closing Costs ÷ Monthly Savings
For example, if your refinance costs $4,000 and saves you $200 monthly, your break-even point is 20 months. If you plan to stay in your home longer than this period, refinancing makes financial sense.
Understanding the mortgage refinance process can help you navigate it with confidence. Here's what to expect when refinancing with Clover Mortgage:
We begin with a thorough assessment of your current mortgage, financial situation, and refinancing goals. This helps us determine if refinancing aligns with your objectives and what options might best suit your needs.
You'll need to provide various financial documents, including:
An appraisal determines your home's current market value, which is crucial for calculating your loan-to-value ratio and available equity. In hot markets like Toronto, property values may have increased significantly since your original mortgage, potentially giving you access to more equity.
With your documentation and appraisal in hand, we submit your application to lenders. Our team at Clover Mortgage leverages our relationships with over 40 lenders to find you the best possible terms for your refinance loan.
The lender reviews your application, verifies your information, and assesses risk before making a final approval decision. This typically involves a detailed analysis of your credit report, income, assets, and property value.
At closing, you'll sign your new loan documents, pay any closing costs not rolled into the loan, and complete the refinance process. Your new mortgage pays off your existing loan, establishing new terms going forward.
Understanding the costs associated with mortgage refinancing helps you make an informed decision and accurately calculate potential savings:
| Cost Type | Typical Range | Notes |
|---|---|---|
| Mortgage Prepayment Penalty | 3 months' interest to 4.5% of principal | Varies by lender and mortgage type |
| Legal Fees | $700-$1,500 | Includes title search, registration |
| Appraisal Fee | $300-$500 | Required for most refinances |
| Title Insurance | $150-$350 | Protects against title defects |
| Discharge Fee | $200-$350 | Fee to remove old mortgage |
| Registration Fee | $70-$200 | Provincial fee to register new mortgage |
One of the most significant costs when refinancing is the prepayment penalty for breaking your existing mortgage before the term ends. These penalties vary based on:
For fixed-rate mortgages, the penalty is typically the greater of three months' interest or the interest rate differential (IRD). For variable-rate mortgages, it's usually three months' interest.
Ask about no-closing-cost refinance options where the lender pays closing costs in exchange for a slightly higher interest rate
While a good credit score typically secures the best refinance rates, homeowners with less-than-perfect credit still have options. At Clover Mortgage, we specialize in helping clients with diverse credit situations achieve their refinancing goals.
The team at Clover Mortgage has extensive experience with bad credit mortgage solutions. We've helped numerous homeowners with credit challenges successfully refinance their mortgages and improve their financial situations.
If you're concerned about your credit score, it's best to consult with one of our mortgage professionals before making any decisions. We can assess your situation and provide tailored advice on improving your refinancing options.
Every homeowner's situation is unique, but certain refinancing scenarios are particularly common. Here's how refinancing can address various financial needs:
If you're carrying high-interest debts like credit cards (often with rates of 19-29%), personal loans, or car loans, consolidating them into your mortgage can dramatically reduce your interest payment and improve monthly cash flow.
Example: A homeowner with $30,000 in credit card debt at 22% interest pays about $550 monthly in interest alone. By consolidating this debt into a mortgage at 4.5%, their monthly interest cost drops to approximately $112 — saving over $400 monthly just in interest.
Consider debt consolidation refinancing if:
Learn more about debt consolidation options
Sometimes the goal is simply to improve your existing loan terms without taking cash out. A rate-and-term refinance can:
Accessing equity for renovations or home improvements can increase your property's value while making it more comfortable for your family.
Popular improvement projects funded through refinancing include:
Explore our home renovation loan options
Many Canadians use their home equity to purchase investment properties, creating additional income streams and building wealth through real estate.
Benefits of refinancing for investment purposes:
Clover Mortgage was established on the foundation of our Co-Founders' 20+ years of experience in leading the Canadian mortgage industry. Our team's deep understanding of the Toronto and Ontario markets allows us to navigate local nuances effectively.
Our strong relationships with over 40 major banks and lenders enables our team to offer over 300 different custom mortgage products to you, our valued client. This broad access ensures we can find the perfect refinancing solution for your unique situation.
We pride ourselves on providing our clients with knowledgeable and honest service and advice. Our approach isn't one-size-fits-all — we take the time to understand your goals and financial situation before recommending refinancing options.
Beyond simply finding lenders, we negotiate on your behalf to secure the best possible rates and terms. Our volume of business gives us leverage that individual borrowers typically don't have when approaching lenders directly.
Mortgage refinancing offers numerous potential benefits, from lower monthly payments and interest rates to access to home equity for important financial goals. However, the decision to refinance should be carefully considered based on your unique circumstances.
At Clover Mortgage, we're committed to helping you make the best choice for your financial future. Our team will take the time to understand your goals, explain all available options, and guide you through the refinance process from start to finish.
Current refinance rates in Canada vary based on your credit profile, loan amount, and property type. The annual percentage rate (APR) for 5-year fixed rate loans typically ranges from 3.99% to 4.89%, with variable options starting at 3.40%.
Refinancing makes sense when it serves your financial goals, like securing a lower interest rate, reducing your repayment period, or accessing equity. Use our mortgage refinance calculator to determine if potential savings justify the upfront costs for your single family primary residence.
Typically, refinancing costs include legal fees ($700-$1,500), appraisal ($300-$500), and lender origination fees. The total usually ranges from 2-5% of your loan amount, though some lenders offer no-cost options with slightly higher rates.
Yes, breaking your current mortgage typically incurs a prepayment penalty — usually three months' interest or the interest rate differential. Some lenders waive penalties for borrowers switching between their loan programs or with high loan approval qualifications.
Rather than limiting yourself to one bank, working with a broker like Clover Mortgage gives you access to multiple mortgage lenders and loan programs. This ensures you get the best loan estimate with competitive rates and favorable terms.
You'll need income verification, property information, your current loan details, and credit reports. For federal housing administration loans or specialized programs, additional documentation may be required to complete the loan approval process.
The typical mortgage refinance takes 30-45 days from application to closing. The process includes loan approval, property appraisal, and preparation of loan documents. Setting up automatic payments and an escrow account occurs after closing.
Yes, though your options might be limited. Specialty lenders offer fixed rate loans for credit-challenged borrowers, often with higher rates. Some require larger down payments or discount points to offset risk associated with lower credit scores.
Your estimated monthly payment depends on your new interest rate, loan amount, and term length. Most people refinance to lower their payment or shorten their term. Payment examples provided during the application help illustrate potential savings.
Yes, the Servicemembers Civil Relief Act provides special protections and refinance options for military personnel. Many lenders offer VA loans with competitive rates, no mortgage insurance, and just one loan to simplify the home buying process.
