6 Reasons to Refinance your Mortgage

Shanna Davis • March 16, 2021

Is now a good time to refinance your mortgage? Well, maybe! Interest rates are very low right now, and according to the bank of Canada, they will most likely remain low until at least 2023. So while everyone has different reasons to access their home equity, to a maximum of 80% of the property value, here are 6 reasons refinancing your mortgage might make sense to you.

Your mortgage is up for renewal anyway.

If your mortgage is up for renewal and you’re looking at a new term anyway, this is the perfect time to consider adding money to the balance outstanding as there won’t be a cost to break your existing mortgage. Breaking your mortgage mid-term will incur a penalty. Waiting until your term is up won’t.

It lowers your overall cost of borrowing.

The goal with any mortgage is to pay the least amount of money back to the lender as possible. When considering your mortgage options at the outset, this might mean taking the mortgage with the lowest rate, while it might also mean paying a little higher rate in favour of more flexible terms. It’s all about calculating the best option for you at that time.

When considering a refinance, it’s very similar. You should consider breaking your term anytime and paying the penalty if the terms on the new mortgage can save you more money in the coming years.

These aren’t calculations you can easily make on your own. However, in talking with an independent mortgage professional, you should be able to clearly assess if breaking your current mortgage will save you money in the long run.

To consolidate all your debts into one payment.

Life happens. Sometimes a financial reset is in order. If you have high-interest unsecured debt that is eating up your cash flow, bringing everything into one low payment secured by your mortgage could be a great option for you. Not only does this option give you breathing room in your daily life, but it will also help to protect your credit score if you are at risk of missing payments.

Debt restructuring is probably one of the most common reasons people refinance their mortgages.

To increase the value of your home.

Home renovations can be expensive. Saving up to renovate properly can take a long time. The idea of using your home equity to pay for renovations upfront, especially ones that increase the overall value of your home, can make a lot of financial sense.

Also, with more Canadians working from home due to the changes brought about by COVID-19, adding a home office or finishing a basement to increase the livable space in your home might be a great reason to refinance.

To build wealth through investing in property.

Purchasing a rental property can be a great way to build long term wealth. Although there can be some hassle involved in dealing with renters, having a tenant cover the mortgage cost as the property appreciates can be profitable long term.

Depending on your situation, purchasing a condo for your kids while they attend school is another option to invest in property. And while a vacation home might cost you financially, it can be considered a solid investment in your lifestyle.

If you have significant equity, consider a refinance of your existing property to come up with the funds or downpayment require to purchase another property.

Because you can do whatever you want with your money.

The equity you’ve built up in your home is money you have. However, to access that money, you'll either have to sell your home or borrow against it. And as it’s cold in Canada in the winter, having a home to live in is a good idea. So, if you’re looking to refinance your mortgage to access your equity, do it for whatever reason you like.

Maybe you want to start a new business, maybe you want to help a family member through hard times, maybe you want to help your kids pay for their education, or maybe you want to buy a Harley. The truth is, it doesn’t really matter what you do with the money, as long as you pay the lender back what you borrowed plus the interest.

Of course, with that said, some reasons to refinance might be a little bit better than others, but you can weigh the financial cost accordingly. However, as rates are really low right now, depending on the terms of your existing mortgage, a refinance might make sense.

If you’d like to talk about what a refinance looks like given your existing mortgage and financial situation, let’s do a cost/benefit analysis together. Please contact me anytime.

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SHANNA DAVIS

Mortgage Broker

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What Is a Cashback Mortgage and How Does It Work?

By Shanna Davis • May 21, 2026

Cashback Mortgages: Are They Worth It? Here’s What You Need to Know If you’ve been exploring mortgage options and come across the term cashback mortgage , you might be wondering what exactly it means—and whether it’s a smart move. Let’s break it down in simple terms. What Is a Cashback Mortgage? A cashback mortgage is just like a regular mortgage—but with one extra feature: you receive a lump sum of cash when the mortgage closes . This cash is typically: A fixed amount , or A percentage of the total mortgage , usually between 1% and 7% , depending on your mortgage term and lender. The money is tax-free and paid directly to you on closing day. What Can You Use the Cashback For? There are no restrictions on how you use the funds. Here are some common uses: Covering closing costs Buying new furniture Renovations or home upgrades Paying off high-interest debt Boosting your cashflow during a tight transition Whether it’s to help you settle in or catch up financially, cashback can offer a helpful buffer— but it comes at a cost . The True Cost of a Cashback Mortgage Here’s the part many people overlook: cashback mortgages come with higher interest rates than standard mortgages. Why? Because the lender is essentially advancing you a small loan upfront—and they’re going to make that money back (and then some) through your mortgage payments. So while the upfront cash feels like a bonus, you’ll pay more in interest over time to have that convenience. Breaking Down the Numbers It’s hard to give a blanket answer about how much more you’ll pay since it depends on: Your interest rate The cashback amount The mortgage term Your payment schedule This is why it’s important to run the numbers with a mortgage professional who can help you compare this option with others based on your personal financial situation. Are You Eligible for a Cashback Mortgage? Not everyone qualifies. Cashback mortgages generally come with stricter requirements . Lenders often want to see: Excellent credit history Strong, stable income Low debt-to-income ratio If your mortgage file includes anything “outside the box”—like being self-employed or recently changing jobs—qualifying for a cashback mortgage might be tough. What If You Need to Break the Mortgage? This is one of the biggest risks with cashback mortgages. If your circumstances change and you need to break your mortgage early, you could be on the hook for: Paying back some or all of the cashback you received, and A prepayment penalty (typically the interest rate differential or 3 months’ interest—whichever is higher) That can be a very expensive combination. So if there’s even a chance you might need to sell, refinance, or move before your term is up, a cashback mortgage might not be the best fit. Should You Consider a Cashback Mortgage? Maybe—but only with eyes wide open. Cashback mortgages can be helpful in the right scenario, but they’re not free money. They’re a lending tool that benefits the lender , and the key is knowing exactly what you’re agreeing to. Final Thoughts: Talk to an Expert First Choosing the right mortgage isn’t just about the lowest rate or the biggest perk—it’s about making a choice that fits your whole financial picture. If you’re considering a cashback mortgage, or just want to explore all your options, let’s talk. As an independent mortgage professional , I can help you weigh the pros and cons of various products, so you can make a confident, informed decision. Have questions? I’d be happy to help—reach out anytime.

Mortgage Approval 101: GDS & TDS Explained

By Shanna Davis • May 7, 2026

Can You Afford That Mortgage? Let’s Talk About Debt Service Ratios One of the biggest factors lenders look at when deciding whether you qualify for a mortgage is something called your debt service ratios. It’s a financial check-up to make sure you can handle the payments—not just for your new home, but for everything else you owe as well. If you’d rather skip the math and have someone walk through this with you, that’s what I’m here for. But if you like to understand how things work behind the scenes, keep reading. We’re going to break down what these ratios are, how to calculate them, and why they matter when it comes to getting approved. What Are Debt Service Ratios? Debt service ratios measure your ability to manage your financial obligations based on your income. There are two key ratios lenders care about: Gross Debt Service (GDS) This looks at the percentage of your income that would go toward housing expenses only. 2. Total Debt Service (TDS) This includes your housing costs plus all other debt payments—car loans, credit cards, student loans, support payments, etc. How to Calculate GDS and TDS Let’s break down the formulas. GDS Formula: (P + I + T + H + Condo Fees*) ÷ Gross Monthly Income Where: P = Principal I = Interest T = Property Taxes H = Heat Condo fees are usually calculated at 50% of the total amount TDS Formula: (GDS + Monthly Debt Payments) ÷ Gross Monthly Income These ratios tell lenders if your budget is already stretched too thin—or if you’ve got room to safely take on a mortgage. How High Is Too High? Most lenders follow maximum thresholds, especially for insured (high-ratio) mortgages. As of now, those limits are typically: GDS: Max 39% TDS: Max 44% Go above those numbers and your application could be declined, regardless of how confident you feel about your ability to manage the payments. Real-World Example Let’s say you’re earning $90,000 a year, or $7,500 a month. You find a home you love, and the monthly housing costs (mortgage payment, property tax, heat) total $1,700/month. GDS = $1,700 ÷ $7,500 = 22.7% You’re well under the 39% cap—so far, so good. Now factor in your other monthly obligations: Car loan: $300 Child support: $500 Credit card/line of credit payments: $700 Total other debt = $1,500/month Now add that to the $1,700 in housing costs: TDS = $3,200 ÷ $7,500 = 42.7% Uh oh. Even though your GDS looks great, your TDS is just over the 42% limit. That could put your mortgage approval at risk—even if you’re paying similar or higher rent now. What Can You Do? In cases like this, small adjustments can make a big difference: Consolidate or restructure your debts to lower monthly payments Reallocate part of your down payment to reduce high-interest debt Add a co-applicant to increase qualifying income Wait and build savings or credit strength before applying This is where working with an experienced mortgage professional pays off. We can look at your entire financial picture and help you make strategic moves to qualify confidently. Don’t Leave It to Chance Everyone’s situation is different, and debt service ratios aren’t something you want to guess at. The earlier you start the conversation, the more time you’ll have to improve your numbers and boost your chances of approval. If you're wondering how much home you can afford—or want help analyzing your own GDS and TDS—let’s connect. I’d be happy to walk through your numbers and help you build a solid mortgage strategy.