In the Greater Toronto Area, mortgage rules and guidelines have been in a state of flux for two months. Seems like every week, lenders are modifying or even suspending certain lending programs.

Recently affected are rental properties, refinances and the length of amortization periods; and mortgages for self-employed Canadians are even harder to obtain now. Furthermore, in the past two weeks, mortgage interest rates have crept up between 0.25 and 0.4%.

If you are a homeowner with upcoming financial needs, you should seriously consider refinancing your home sooner rather than later. Here are some reasons why:

Toronto mortgage interest rates may go up further. For a refinance, most lenders will allow you to hold a rate for 90 days, and some 120 days. You can get your application in now, and take your time about completing the transaction. At least you will be rate protected.

The number of lenders offering 30 year amortization mortgages without tacking on an interest rate premium for the privilege has shrunk dramatically. Balance sheet lenders (such as banks and credit unions and certain lenders) have resisted so far, but who knows what lies ahead.

If you are carrying high interest credit card debt, car loans or even personal lines of credit, it may well be to your advantage to roll all these into your mortgage; pay off all these debts, and improve your monthly cash flow dramatically.

If you are planning to buy an investment property, tapping into your home equity for the down payment, consider extracting the equity now, while the going is good.

If you plan to help your kids buy their first home or perhaps finance their education, there’s a lot to be said for getting this done now.

If your current mortgage is coming up for renewal in the next year or so, it may well be worth your while to terminate that mortgage early; pay a modest prepayment penalty, and lock in a cracking good rate and mortgage terms for the next five years.

Most people who have five year mortgages maturing in the next year have rates between 2.89% and 3.29%, so this could be a real pick up!

If your marriage is breaking up and one of you is going to stay in the family home, now is a good time to restructure your mortgage to pay out your spouse.

If you have plans to refresh or renovate your home, with rates and terms this agreeable, you may be well served to extract some equity now to pay for the project. It’s cheap!

If you are in the middle of a consumer proposal, you should seriously think about refinancing your home now and paying it off early. You will not end up with an “ A lender” at this time, but you will position yourself very well to transition over in two to three years’ time.

Related Article: Why you should pay off a consumer proposal early

If you would like to understand your refinancing options in strict confidence call us at 416-989-1000 for a free consultation.

If you prefer, you can email Ross at He answers every email he receives personally.

Tip of the Day

If the bank doesn’t want to speak with you… if alternate lenders are not interested… if all seems hopeless but selling your home isn’t an option… a private mortgage may be your only hope

— Money Matter № 168