Refinancing replaces or changes your mortgage, often to borrow more or change the repayment period. For teachers, the decision depends on available equity, accepted income, costs and a payment that fits take-home pay. Compare the full cost with keeping the mortgage until renewal.
Do you need a renewal or a refinance?
| Your plan | What to compare |
|---|---|
| Your term is ending and you do not need more money | Renewal offers or a straight switch, keeping the balance and remaining repayment period |
| You need money for renovations or to repay other debts | A refinance or another equity-borrowing option, including its setup costs |
| You want smaller payments by taking longer to repay | The payment reduction alongside the extra interest and later debt-free date |
Estimate the equity you could use
A common borrowing limit is 80% of the appraised home value, less the mortgage and other debt secured against the property. The lender must accept the valuation and approve the application; equity alone is not an approval.
| Calculation | Amount |
|---|---|
| 80% of $700,000 | $560,000 |
| Less the current mortgage | $400,000 |
| Potential additional borrowing before costs | $160,000 |
Penalties, fees and debts paid out reduce the cash left for your project. This example is a borrowing limit, not a recommendation to use all of it.
Ask for the cost of leaving your current mortgage
Breaking a closed mortgage before maturity normally brings a prepayment penalty. Ask your current lender for a payout quote for the date you are considering, including any cash-back repayment.
- Compare the penalty, discharge and administration charges.
- Include appraisal, legal, registration and any brokerage fees for the replacement mortgage.
- Compare refinancing now with waiting until maturity and any option your current lender offers.
A lower advertised rate does not establish a saving. Compare payments, interest, fees and the balance remaining over the same period.
Check income and approval requirements
A refinance needs a fresh assessment of income, credit, debts and the property. For most uninsured refinances at federally regulated lenders, qualification uses the higher of the contract rate plus two percentage points or 5.25%. The exemption for an eligible straight switch at renewal does not cover increasing the balance or extending the remaining amortization.
- Use current salary evidence if your teaching role or workload has changed.
- For LTO or supply work, bring earnings history and current assignments rather than relying on an annual grid salary.
- If leave or retirement is approaching, compare the proposed payment with the income you expect to receive then.
If you are combining other debts
Moving credit-card or loan balances into a mortgage may reduce the rate or monthly payment, but a longer repayment period can increase total interest. The debt also becomes secured against your home, which is at risk if you cannot make the payments.
- List each debt balance, rate, payment and expected payoff date.
- Compare the total repayment cost, including refinancing charges.
- Set a repayment plan for the added debt and a budget that avoids rebuilding the old balances.
Prepare for the comparison
Use the payment calculator for an initial comparison. Then share your plans so Emily and Jeff can check the costs, documents and options with you.
- Your mortgage statement, maturity date and current payout quote.
- Property-tax information and statements for any HELOC or other secured borrowing.
- Current employment letter, pay stubs and any tax records requested for your income type.
- The amount you need, what it is for and when you need it.
Sources and dates
Sources below support the relevant figures and rules. Source dates and historical salary years are shown where available. A planned review date does not guarantee that a figure stays current; check the source and your own eligibility before acting.
- Financial Consumer Agency of Canada, borrowing against home equity (accessed 2026-10-13)
- Financial Consumer Agency of Canada, breaking your mortgage contract (accessed 2026-10-13)
- Financial Consumer Agency of Canada, debt consolidation (accessed 2026-10-13)
- OSFI, minimum qualifying rate for uninsured mortgages (as of 2026-01-29)
- CMHC, mortgage application tips and documents (accessed 2026-10-13)
First published . Updated . Source dates are listed above.
Common questions
Can I refinance before my mortgage renews?+
Possibly, if the contract permits it and the new application is approved. Get a dated payout quote and compare the penalty and setup costs with waiting until maturity.
Can I refinance while on an LTO contract or parental leave?+
You can ask for an assessment. Explain your assignment dates or return-to-work plans and provide the requested income records. Equity does not replace the income and affordability review.
Does a lower monthly payment mean I save money?+
No. Extending repayment can lower the payment while increasing total interest. Compare costs and the remaining debt over the same period.
Discuss your mortgage plans
Bring your questions about buying, renewing or refinancing. We will help you understand the next steps.
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