Step-by-step client guide
Refinance and equity takeout
Refinancing taps the equity you've built. The ceiling is firm: 80% of appraised value, no exceptions, and you re-qualify at today's stress-test rate.
Who this guide is for
Existing homeowners consolidating debt, renovating, or pulling equity for any purpose.
Why this is harder than a standard file
The 80% LTV ceiling is firm; appraised value drives the math, and appraised value is rarely the same as listing-price comparables.
Track exactly where you are on this file.
Tick off each step and document as you complete it. Progress saves on this device — no account, no sign-in. Pick up later from the resume banner.
Estimate your home value conservatively. Use sold comparables in your neighbourhood, not list prices. Multiply by 80%, subtract your current mortgage — that's the maximum you can pull.
Your plan
0 of 3 plan steps completeDocuments to assemble
0 of 3 documents gatheredMistakes we see clients make in this scenario
- ·Assuming the appraisal will match your Zillow estimate.
- ·Refinancing mid-term and getting hit with a large pre-payment penalty (often $5k–$30k+ on a fixed mortgage).
Red flags that will sink the file
- Refinancing to consolidate debt without changing spending behaviour — the debt comes right back.
What this realistically costs you
- Legal and appraisal fees typically $1,000–$1,800.
- Pre-payment penalty on a fixed mortgage can be substantial — get the exact figure from your current lender in writing before deciding.
How the underwriter actually reads this
Use of funds matters. Debt consolidation and home improvement are well-received; speculative investment use can affect appetite at some lenders.
What moves this file up
- Order an independent appraisal in advance for high-confidence files
- Pay off small high-rate balances before applying so consolidation amount is precise
- Document use-of-funds clearly
Questions clients ask us
The interest math almost always favours it. The behaviour question is whether the credit cards stay paid off afterward.
Get a real, underwritten pre-approval — not a system-generated number.
We'll route your file to a lender whose policy fits this scenario. No credit pull until you've seen the plan.
Start your pre-approvalOther scenarios
Written and reviewed by the Canadian Mortgage Compass Editorial Desk. This page is general information for Canadian readers and is not mortgage, legal, tax, or financial advice, and not an offer of credit. Rules, rates, and lender policies change; confirm your own situation with a licensed mortgage professional in your province. Editorial policy · Corrections