30 Sep

Should I refinance my mortgage to pay off debt?


Posted by: Lisa Oleksiuk

Refinancing your home to pay off high interest debt, such as credit cards, is an excellent option to consider. By refinancing, you can combine several payments into one, reducing your monthly expenses. As well, mortgage rates are much lower than standard credit card interest rates, saving you money on interest. This will also provide you with more cash flow on a monthly basis. 

Refinancing allows you to access up to 80% of the equity in your home. As home prices in the area increase, the equity available to you increases as well. Tapping into this equity may be the right option if you are struggling to meet your monthly obligations. It is a good idea to set a budget after refinancing to ensure your debt load remains low afterwards.

There are several considerations when refinancing, such as the amount of equity available, current mortgage amount, current mortgage rate (today’s rate may be lower) and potential penalties, if any with your current lender. It is important to review your specific situation to determine if refinancing your home is right for you.