CHUNLIE JI

Fixed vs. adjustable rates: fixed offers stability; ARMs start lower, adjust later—choose based on your future plans.
Shortening loan term saves on interest; extending term lowers monthly payments but increases total interest.
Lowering your rate by 0.5% on a $300K loan can save up to $5,000 over 5 years.
Consulting experts provides tailored advice, helping you avoid pitfalls and maximize refinancing benefits.
Timing matters: monitor market trends and seasonal lender offers for optimal refinancing opportunities.

Refinancing Strategies to Lower Costs

Applies to all Canadian homebuyers since 2018; must prove ability to pay if rates rise.
Test uses higher of 5.25% or offered rate + 2% to assess affordability.
Directly impacts mortgage qualification and borrowing amount; may require higher down payment or lower budget.
2024 update: No test needed for straight switch to new lender with same terms.
Test aims to prevent excessive debt; use affordability calculators or consult specialists for guidance.