Refinancing is the process of replacing an existing loan with a new loan that has more favorable terms, such as a lower interest rate or longer repayment period. In Canada, there are several refinancing options available to borrowers, including:
- Mortgage Refinancing: This involves replacing an existing mortgage with a new one, either with the same lender or a different one. The new mortgage may have a lower interest rate, longer repayment period, or both, which can result in lower monthly payments and/or a lower total cost of borrowing over time.
- Home Equity Line of Credit (HELOC): A HELOC allows homeowners to borrow against the equity in their home, which is the difference between the value of the home and the outstanding mortgage balance. This type of refinancing can be used for a variety of purposes, such as home renovations, debt consolidation, or to fund a major purchase.
- Debt Consolidation: This involves combining multiple debts into a single loan with a lower interest rate and/or longer repayment period. Debt consolidation can help simplify the repayment process and lower overall borrowing costs.