Question 1

I own my home free and clear — which mode should I use?

Accepted Answer

Use the "Cash out — no current mortgage" mode. It calculates a new first-position mortgage against your home's equity. In Canada, cash-out (equity take-out) mortgages on owner-occupied homes are capped at 80% of appraised value and are uninsured — CMHC insurance is not available for equity take-outs. You'll see your monthly payment, total interest, and remaining equity instantly.

Question 2

When does refinancing make financial sense?

Accepted Answer

Refinancing makes sense when the interest savings over your remaining term exceed the prepayment penalty and closing costs. A common rule of thumb is that a rate drop of 0.5% or more can justify refinancing, but the breakeven period matters — if you plan to sell before breaking even, it may not be worth it.

Question 3

What is a prepayment penalty?

Accepted Answer

Most fixed-rate mortgages charge the greater of 3 months' interest or the Interest Rate Differential (IRD) to break your mortgage early. Variable-rate mortgages typically charge just 3 months' interest. The IRD can be substantial if you're breaking a fixed mortgage and rates have fallen since you got it.

Question 4

Can I access my home equity when refinancing?

Accepted Answer

Yes — refinancing lets you increase your mortgage up to 80% of your home's appraised value. The additional funds can be used for renovations, debt consolidation, investments, or other major expenses. This is called a cash-out refinance or equity takeout.

Question 5

How long does refinancing take?

Accepted Answer

Refinancing typically takes 30–45 days from application to funding, though some lenders can move faster. You'll need an updated property appraisal, income verification, and a lawyer or notary to handle the title work. RATECORE mortgage professionals can manage the entire process on your behalf.

Mortgage Refinance & Cash-Out Calculator Ontario 2026

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