What does it mean to refinance your mortgage?
Refinancing your mortgage means using the net value of your home to borrow more money. Your mortgage amount generally increases when you refinance.
With refinancing, you can carry out the projects that matter to you, such as:
- Renovating or fixing up your home
- Going back to school
- Buying a second home
Good to know
The net value is the difference between the current determined
Benefits to refinancing your home
Good rates
Get interest rates that are often below those for a personal loan or line of credit, since your home is serving as collateral for your loan.
Flexible repayment options
Choose among our various refinancing solutions and stagger your payments according to your project.
Easy-to-manage loans
Group your loans under your mortgage to keep better track of your payments.
Opportunity to review your financial situation
Use the refinancing process to make sure your insurance and financial products still meet your needs.
A few things to keep in mind
- Estimate your project costs to see if refinancing makes sense for your needs. A personal loan or line of credit may work better for you, especially if you want to repay your loan within a short period.
- Review your budget to see if you can afford a higher mortgage payment. Remember to keep a buffer for unexpected expenses.
- Consider that you may have to pay certain fees related to refinancing, such as prepayment charges, notary fees and property assessment fees.
Best times to refinance
You can refinance your home and review your financing amount at any time, but certain times are better than others:
- During the renewal period, if you have a mortgage with us
- When you're transferring your mortgage to us, if you have a mortgage with another financial institution
How does mortgage refinancing work?
You can borrow up to 80% of the determined value of your home through refinancing. Learn how to apply so you can understand the process and what to expect.
1. Prepare your refinancing application
Make an appointment with your mortgage advisor and review our mortgage rates beforehand. You can also familiarize yourself with our refinancing products, such as our mortgages and the Versatile Line of Credit.
Gather the documents we need to evaluate your file before meeting with your advisor. Make sure you're up to date on your taxes.
- Proof of income (such as a pay stub or federal notice of assessment)
- Investment statements
- Copies of municipal and school taxes
- Current leases, profit and loss statements (tax schedules) and provincial and federal notices of assessment for the past 2 years, if you have income property
We may ask for more documents, such as quotes or loan statements, depending on your situation.
2. Meet with your advisor
Discuss your project with your mortgage advisor. Explain your needs and show them your documents. You can review products and interest rates together to find the right solution for you.
After the meeting, your advisor will do a full analysis of your current situation and financial capacity. This will decide your eligibility for refinancing. This may take some time depending on your file and the documents provided.
Property evaluation
To see if you're eligible for refinancing, you may need to get the value of your property appraised by a certified appraiser. You pay for this appraisal (when it's required).
3. Finalize your refinancing file
Your mortgage advisor will let you know if you've qualified for refinancing once they're done analyzing your file. If you're eligible, you'll be told the amount you can access so you can set up the final terms of your new loan.
Once the final details are settled, you sign the new loan agreement and other required documents. Depending on your situation, you may need to see a notary at this step.
Refinancing so you can renovate?
Get quick access to a network of renovation professionals thanks to EspaceProprio, a Desjardins initiative.
See your funding options and get tips.
- Learn about federal, provincial and municipal grants available for renovations.
- Take a look at our Sustainable Home Program to see how you can save money with environmentally friendly renovations.
- Get tips to make sure your project succeeds by reading our article: Renovations: Plan before you take the plunge.
FAQ
They may seem similar, but refinancing and renewing refer to different things.
- When you refinance, you use the net value of your home to borrow more money.
- When you renew at the end of your term, you continue to pay down your mortgage with new agreed-upon conditions, but without borrowing more. If you increase your amount borrowed during your renewal, you're also refinancing.
At Desjardins, both refinancing and remortgaging mean that you're using the net value of your home to finance another project. The difference mainly lies in the need to sign a new mortgage deed in the presence of a notary.
- When you refinance, you're borrowing more money on top of your current loan. Often, you don't need to see a notary.
- When you remortgage, you need to sign a new mortgage deed at a notary's office. This might happen, for example, if the additional amount you borrow exceeds the amount listed on your mortgage deed. This may also happen if you move or if you transfer your mortgage to us.
Remortgaging is not the same as just taking out a second mortgage.
When you remortgage, you replace your old mortgage with a new one. If you just take out a second mortgage, you'll have 2 mortgages on your property at the same time.
To know the maximum amount you can borrow through refinancing, calculate 80% of the determined value of your home and subtract the balance on your mortgage.
Keep in mind that this amount is based on the maximum amount authorized for refinancing in general. We have to do a full analysis of your file to see how much you can actually borrow.
Example
You want to do major renovations to upgrade your kitchen and bathrooms. Your property is appraised at $500,000. You have $250,000 left on your mortgage.
You want to estimate the maximum amount you can borrow when refinancing your loan. The maximum amount is 80% of the determined value of your home. You calculate: 80% of $500,000 minus the mortgage balance, which is $250,000. The maximum amount you can borrow is $150,000. This means that if you're approved for and borrow the maximum amount, your new mortgage will come to $400,000. This amount equals the current mortgage balance plus the amount available through refinancing.
Contact your mortgage advisor to find out the exact amount you can borrow for renovations.
Yes, you can refinance more than once. However, keep in mind that we check your credit report each time you apply. Repeated checks on your credit report may affect your credit score, so make sure you refinance only when necessary.
Apply for refinancing
By phone
Monday to Friday: 8 AM to 9 PM
Saturday: 9 AM to 6 PM
Elsewhere in Canada:
1-844-626-2476 Canada-wide mortgage services. This link opens your phone app.
We can also call you when it's convenient.