How many residential mortgages can I have?

The number of mortgages you can have is unlimited. Rather, people are constrained by their capacity to manage several mortgages or their financial status. First and second mortgages are two mortgages that are typically held concurrently on a same property.

What is a second mortgage Canada?

Second mortgage is a second loan or funding you take on your residential property. Interest rates on second mortgages are usually higher than first mortgages and you need to pay both your mortgages at the same time.

What is a conventional mortgage Canada?

A conventional mortgage in Canada is a loan where the down payment is at least 20% of the property's purchase price. This means that the loan amount is 80% or less of the property's value.

How long can you mortgage a home in Canada?

In Canada, you can mortgage a home for 25 years. If you are a first-time buyer or purchasing a new build you can mortgage it for 30 years. These rules took effect on December 15, 2024.

Can I buy a home with less than a 20% down payment?

The minimum amount you need for your down payment depends on the purchase price of the home. If your down payment is less than 20% of the price of your home, you'll typically need to buy mortgage loan insurance. If you're self-employed or have a poor credit history, your lender may require a larger down payment.

Should I choose a fixed rate or variable rate mortgage?

Interest rates either rise or fall. But a study suggests that homeowners with a variable mortgage fair better than a fixed rate one.

19 May The Complete Guide to Mortgage Refinancing in BC: When, Why, and How to Refinance Smart in 2025

Posted at 13:54h in Mortgage Refinancing in Abbotsford by Satbir Bhullar

If you’re a homeowner in Abbotsford, Surrey, Langley, or nearby BC communities, you’ve likely seen your property value rise over the last few years. At the same time, mortgage rates have fluctuated, household expenses have increased, and borrowing rules have become more complex.

As a result, many homeowners are asking: Should I refinance my mortgage in 2025?

The answer depends on your goals. Refinancing can help you:

Reduce your monthly payments
Tap into your home equity
Consolidate high-interest debt
Lock in a better rate or change your mortgage type

This guide breaks down what mortgage refinancing means, when it makes sense, and how to do it strategically in the current market — especially for homeowners in BC.

What Is Mortgage Refinancing?

Mortgage refinancing means replacing your current mortgage with a new one — either with the same lender or a different one. You can refinance to:

Borrow more money (increase the loan amount)
Change your rate (fixed to variable or vice versa)
Adjust your term or amortization
Add or remove a borrower
Access equity for renovations, investments, or debt repayment

It’s not the same as renewing your mortgage at the end of your term — refinancing can happen any time, although it often involves breaking your current mortgage early, which may include penalties.

(Related blog: Refinancing Your Mortgage: How to Do It)

When Should You Consider Refinancing?

Here are some of the most common situations where refinancing makes sense:

Interest Rates Have Dropped

If your current mortgage rate is significantly higher than today’s available rates, refinancing could save you thousands — even after paying a penalty.

For example: If you locked in a 5.5% rate in early 2023 and now see 5-year fixed rates at 4.59%, refinancing might be worth it — especially for homeowners in South Surrey or Clayburn Hills, where mortgages tend to be larger.

You Need to Access Home Equity

If your home has appreciated, you may have built substantial equity. Refinancing lets you access up to 80% of your home’s appraised value, minus the remaining mortgage balance. This can fund:

Home renovations
Business investments
Post-secondary education
Emergency expenses

You Want to Consolidate High-Interest Debt

Refinancing is often used to combine credit cards, personal loans, or car payments into one lower-interest mortgage. This can simplify your finances and reduce your monthly outflow — especially helpful for families managing rising costs in Abbotsford or Langley.

Your Current Mortgage Doesn’t Fit Anymore

Maybe you:

Want to switch from a variable to a fixed rate
Need more flexible prepayment terms
Are separating from a co-owner
Plan to keep the property longer or shorter than originally expected

These are all valid reasons to reassess and restructure your mortgage through a refinance.

What Are the Costs of Refinancing?

Refinancing isn’t free — but the costs can often be offset by long-term savings.

Key costs include:

Prepayment penalty: Often 3 months’ interest or the Interest Rate Differential (IRD)
Legal & appraisal fees: Typically $1,000–$2,000
Discharge & registration fees: Varies by lender and region

Working with a broker helps you calculate the net benefit and determine if refinancing is worth it.

How Much Can You Borrow Through a Refinance?

In Canada, the maximum you can borrow through a refinance is 80% of the property’s current appraised value, less what you still owe on your mortgage.

Example:

Home value: $900,000
80% of value: $720,000
Current mortgage balance: $520,000
Available equity to refinance: $200,000

In BC markets like East Abbotsford or Surrey’s Fleetwood, many homeowners are surprised at how much equity they’ve built up — making refinance a powerful tool.

FAQs: Mortgage Refinancing in BC

Q1. Is there a penalty for refinancing early?

Yes. If you refinance before your mortgage term ends, your current lender may charge a prepayment penalty. This is usually either:

3 months’ interest (for variable-rate mortgages), or
The Interest Rate Differential (IRD) (for fixed-rate mortgages)

However, if the savings from refinancing outweigh the penalty, it can still be financially beneficial.

Q2. How is refinancing different from renewal?

Renewal happens at the end of your mortgage term with no penalty.
Refinancing can occur at any time and often includes changes to your loan amount, term, or lender.

If your renewal date is within 6–12 months, your mortgage advisor can help you time the refinance to minimize costs.

Q3. Can I refinance with bad credit?

Yes, but your options may be limited. Some alternative lenders and private lenders offer refinancing products with flexible credit requirements. However, rates and fees may be higher.

If your credit is recovering, a mortgage broker can help you explore lender options or advise on how to improve your approval profile before applying.

Q4. Can I refinance to pay off consumer debt?

Absolutely. Refinancing to consolidate high-interest debt (credit cards, lines of credit, car loans) into a lower-interest mortgage is one of the most common strategies. It reduces monthly payments and simplifies cash flow — especially important in 2025 with higher living costs.

Q5. Do I have to stay with my current lender?

No. When refinancing, you can switch to a new lender if they offer better terms or rates. Just be aware of associated legal and transfer fees — many of which may be covered by the new lender.

Q6. Refinance vs. HELOC: What’s the Difference?

A HELOC (Home Equity Line of Credit) is a revolving line of credit secured by your home’s equity. You can borrow from it as needed, and only pay interest on what you use. It offers flexibility — but often comes with variable rates and fewer fixed repayment schedules.

Refinancing, by contrast, gives you a lump sum with structured monthly payments, typically at a fixed rate. It’s best when:

You need to consolidate debt
You want rate stability
You’re planning a one-time large expense

Both options are valuable — but your choice should reflect your financial goals and discipline.

Tips to Improve Refinance Approval and Terms

Know Your Equity Position

Lenders allow you to refinance up to 80% of your home’s value. If home prices in your area have risen, you may qualify to borrow more than expected.

Clean Up Credit Before Applying

Your credit score directly impacts your refinance rate. Pay down revolving balances, avoid new inquiries, and correct reporting errors before applying.

Document All Income Sources

Whether you’re salaried, self-employed, or earning rental income from a secondary suite, lenders want proof. Be ready with:

T4s or tax returns
Bank statements
Lease agreements (if applicable)

Time Your Refinance Strategically

If your mortgage is up for renewal in the next 6–12 months, it may be worth waiting to avoid penalties — or discussing a blended refinance with your current lender.

Local Market Insight: Refinancing in Abbotsford & Surrey

In Abbotsford, Surrey, and Langley, home values remain strong, and many homeowners have built substantial equity — even with interest rate fluctuations. This creates a valuable opportunity to refinance for:

Debt consolidation
Down payment on a second property
Renovations or home upgrades
Emergency financial relief

Many Fraser Valley homeowners are also choosing to refinance into longer amortizations to reduce monthly pressure and increase cash flow.

Final Thoughts: Use Refinancing to Realign Your Financial Plan

Mortgage refinancing isn’t just about saving money — it’s about realigning your mortgage with your life stage, financial goals, and market conditions.

Whether you’re trying to unlock equity, reduce payments, or restructure for flexibility, refinancing gives you control — but only when done with full clarity on timing, costs, and lender options.

Thinking about refinancing your mortgage in Abbotsford, Surrey, or the Fraser Valley?
Let’s review your goals and determine the best refinance strategy for your situation.

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Mortgage Refinance refinancing a mortgage in Surrey

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