Are you feeling anxious about cashflow leading up to the holiday season? If so, you may want to consider refinancing your mortgage to access some home equity as opposed to letting interest build up when you charge your purchases to credit cards or credit lines.


This hot housing market has seen home equity grow at a rapid pace for well over a year. That means you’ll have access to more money to help ease holiday spending on gifts and entertainment to prevent additional debt from creeping up. 


You may also be able to use some of your home equity to pay off high-interest debt associated with existing credit card balances, and keep more money in your bank account.


The key is to plan ahead. Your mortgage agent can look at your situation and advise on the best way to improve your cashflow moving forward.


Are rates rising?

Prominent Bay Street economist Benjamin Tal said that, if the market is correct in its “aggressive” expectation that the Bank of Canada could hike its benchmark interest rate at least six times beginning in early 2022, then homeowners and homebuyers should start preparing sooner rather than later.


It makes sense to speak to your mortgage agent now when rates are still low if you’re planning on buying a new home, your mortgage is coming up for renewal or you want to tap into your home equity with a refinance.


Early exit penalties

There are penalties for paying your mortgage loan out prior to renewal, but these can be offset by the lower rates you’ll pay by rolling debt into your mortgage as opposed to keeping balances on credit cards and credit lines. 


With access to more money, you’ll be better able to manage both your holiday spending and existing debt. Refinancing your mortgage and taking some existing equity out could also enable you to make investments, go on vacation, do some renovations or even invest in your children’s education. 


By refinancing now and planning ahead – before the holiday season begins and rates rise – you can put yourself and your family in a better financial position. 


Thinking of taking advantage of your home’s equity through a refinance? Answers to all your questions are a call or emailaway!