Q: Does it cost money to refinance my mortgage in Canada?

A: Yes, refinancing involves breaking your current mortgage contract. You will likely pay a prepayment penalty to your lender, as well as real estate lawyer fees to change the title. However, the long-term interest savings often outweigh these upfront costs.

Q: How much penalty will I pay to break my mortgage?

A: For a variable rate, the penalty is usually three months of interest. For a fixed rate, it is the greater of three months' interest or the Interest Rate Differential (IRD), which can be quite expensive.

Q: When is the best time to refinance a mortgage?

A: The best time to refinance is when you can secure an interest rate significantly lower than your current one, when you need to consolidate high-interest debt, or when your current mortgage term is up for renewal (which avoids break penalties).