5 Reasons Why Homeowners Should Consider Mortgage Refinancing

If you have been keeping an eye on the housing market, you have probably seen the news. The Bank of Canada is holding interest rates at 2.75%. This has got a lot of Ontario homeowners asking the same question: Should I rethink my mortgage?

Now could be the perfect time for mortgage refinancing. Rates are steady, home values are strong, and your current loan terms might not be your best option anymore.

A mortgage refinance can lower your monthly payments, unlock home equity, or give you more financial breathing room.

We will explain the five simple reasons to take a second look at mortgage refinancing, and how it could work in your favour right now.

Outlook of Mortgage Refinancing in 2025

Mortgage refinancing means replacing your current mortgage with a brand new one. The mortgage comes with different loan terms, usually better ones.

Maybe you want to lower monthly payments. Maybe you need a different term structure. It could also be that you are done with your variable rate and want to lock things in.

Whatever the reason, refinancing is about adjusting your mortgage to better fit your life. It is not just a fix for people in trouble. In most cases, it is a smart option to stay ahead of rising costs, tap into home equity, or gain more financial control.

A good mortgage refinance deal can even help you save money over the years. While the Bank of Canada has decided to hold interest rates, it does not show the full picture.

In a fall 2024 report, the Canada Mortgage and Housing Corporation (CMHC) said 1.2 million Canadian mortgages are coming up for renewal in 2025.

Out of those, 85% were signed back when rates were at or below 1%.

This is a massive shift. Homeowners who had ultra-low rates could soon face a big jump when their term ends. If they do not act early, they may even be stuck with higher refinance rates and fewer options.

Homeowners are exploring refinancing home loan options now, while the rates are holding and before renewal season hits hard.

Here are the top five reasons to consider mortgage refinancing in 2025:

Lower Interest Rates = Lower Monthly Payments

This is easily one of the biggest reasons people choose mortgage refinancing. When refinance mortgage rates drop, your monthly payments can drop too. It is that simple. Even a small dip in your refinance rates can add up to serious savings over time.

Here is how it works:

• Say you currently owe $400,000 on your mortgage and are locked into a rate of 6.5%. You are paying about $2,530 monthly (just principal and interest).
• Now, if you refinance into a new mortgage with a rate of 5%, the payment becomes about $2,147.
• That is a difference of $383 each month, or $4,596 each year.

Over the life of your mortgage, the savings could be huge and can be used to cater to other expenses like renovations, vacation, investment, etc.

A home refinance at the right rate could mean less money going to interest and more staying in your pocket.

Change Your Loan Terms to Match Your Life

Life situations change. So should your mortgage. With refinancing, you can adjust your loan terms to fit the present. Some people want to speed up payment. Others need to slow them down. Both are okay.

• Maybe you just got a raise and want to pay off your mortgage faster and save on interest. In that case, you can refinance into a shorter term, like switching from a 25-year to a 15-year mortgage.
• On the flip side, maybe you have had a job change with a slight dent in your income. It could be a new baby, or you are helping your child with college tuition. Stretching your loan terms could lower your monthly payment and free up extra cash.
• Some homeowners also opt for refinancing home loan options to prepare for retirement. Less stress, more control.

No matter the reason, mortgage refinancing gives you flexibility. You get to decide what fits best for your goals and budget.

Access the Equity You Have Built

Your home is more than a place to live. It can also be a source of money when you need it most. With a home refinance, you can tap into your home equity and turn it into cash. It is called refinancing a home loan with equity, and it is easy.

Here is how it works. Over time, as you pay down your mortgage and your home value rises, you build equity. Equity is the difference between what your home is worth and what you still owe on it.

For example, if your home is worth $700,000 and you still owe $400,000 on your mortgage, you have $300,000 in equity.

Through mortgage refinancing, you might be able to access $100,000 or more of that equity. Use it for renovations, start a business, help your kids with school.

It is your equity. You have earned it. Now it might be time to use it.

Consolidate High-Interest Debt

There is no shame in high-interest debt. You are not bad with money. The economy is tough on everyone.

• Most credit cards charge interest rates of 19% to 24%.
• Car loans can hover around 8% or more.

But with a mortgage refinance, you may be able to roll that debt into your mortgage at a lower rate.

Here is a breakdown:

• If you owe $30,000 on a credit card at a 20% rate, that will be about $500 a month just in interest charges.
• If you opt for a home refinance and fold the same $30,000 into your mortgage at a new interest rate of 5%,
• Your payment drops to roughly $175 a month in interest.

That is a big difference. High-interest debt can drag you down, but mortgage refinancing could help lift you back up.

Switch from Variable to Fixed (Or Vice Versa)

Mortgages are different. Some have steady rates. Others move up and down. However, one thing is certain: you are not stuck with one forever.

When you go through a mortgage refinance, you can switch your rate type. This gives you more control, especially if you are watching interest rates closely.

• For example, if you are worried rates might rise, locking into a fixed rate can protect you. Your payment stays the same.
• But if refinance mortgage rates drop and you are stuck in a high fixed rate, switching to a variable could save money, at least in the short term.

Each type has its pros and cons. Fixed gives stability. Variable provides flexibility. The important decision is knowing which fits your present life situation.

Canadalend Experts Can Help With Mortgage Refinancing

Thinking about mortgage refinancing but not sure where to start? You are not alone. The process can feel confusing.

At Canadalend, we are committed to helping you find your way. We help you compare refinance rates in Ontario, go over your options, and handle all the paperwork. We look at your full picture and help you find a mortgage refinance plan that fits your goals, not someone else’s.

We are also aware that needs can vary. You could need a shorter term, lower payment, or equity cash rollout. Our team will walk you through it, step by step.

You may not get a better opportunity to refinance mortgage rates. Call Canadalend today at 1-844-586-0710 or contact us online. A few minutes' conversation with our expert brokers could save you thousands.