Refinancing can be a strategic move for homeowners looking to free up cash for renovations, investments or consolidating higher-interest debt.Getty Images
Across the country, scores of Canadian homeowners are debating this question: Should I simply renew my mortgage, or take the opportunity to refinance, either with my current lender or by switching to a new one?
It’s a question that Mudit Jain, senior vice-president of borrowing solutions at CIBC, has been hearing a lot lately. That’s no surprise – according to the Canada Mortgage and Housing Corporation (CMHC), more than one million mortgages will come up for renewal in Canada in 2026, due to the upsurge in pandemic-era home purchases in 2020 and 2021.
Mudit Jain, senior vice-president of borrowing solutions at CIBCSUPPLIED
“Clients are often concerned about how changes in interest rates will affect their monthly payments and overall financial plans,” Mr. Jain says.
For example, an advisor on Mr. Jain’s team recently had a client who was worried about higher monthly payments if they renewed with their current lender. “They wanted to find a way to save money and increase cash flow.”
The CIBC advisor listened to the client’s concerns, explaining the differences between renewing and refinancing, “and helped them compare their options side by side,” says Mr. Jain. Since the client had some equity and another loan, the advisor thought creatively and suggested that refinancing would allow them to consolidate that loan into their mortgage.
The client ended up switching their mortgage to CIBC. “They could lower their overall monthly payments and make their finances easier to manage,” Mr. Jain says. “[They] now have that extra monthly cash flow they needed.”
When it comes to the “renew versus refinance” dilemma, the key is to start looking at your options early, so you can make the decision that’s right for you, he adds.
“Since these choices can affect your finances in different ways, whether that’s your monthly payments, total interest costs or the flexibility of your mortgage term – it’s important to talk through your options with an advisor,” Mr. Jain says. “This helps ensure your mortgage continues to support your short- and long-term goals.”
Wondering what choice may be right for you? Book a meeting with a CIBC advisor to review your options.
Weigh the pros and cons
Mr. Jain says that renewing can be a convenient move if you’re a homeowner who is “satisfied with their existing terms and don’t require access to extra funds [or] the need to consolidate debt,” he says. You won’t need to requalify or pay additional fees.
The downside of renewing is that you may miss out on the opportunity to access home equity. Refinancing can be a strategic move for homeowners looking to free up cash for renovations, investments or consolidating higher-interest debt. In today’s environment of rising costs and shifting priorities, carefully evaluating home equity provides an opportunity to access additional resources and maintain financial stability.
“This option can help lower your overall interest costs and adjust your mortgage terms to fit evolving needs, which is particularly valuable for homeowners facing higher living costs or unexpected expenses,” Mr. Jain says.
Refinancing typically involves additional upfront costs like legal fees, appraisal fees or possible penalties. However, in some cases, these fees can be justified for a substantial interest rate reduction. Mr. Jain notes that some homeowners choose to refinance in order to free up money to invest.
“In some cases, the long-term returns can make up for the initial costs,” he says. “There may also be tax advantages if the money borrowed is used for investment purposes.”
Lenders may also provide incentives, such as cash back, to homeowners considering refinancing. Speaking with a CIBC advisor can help you understand the latest offers and determine the best options for your individual needs.
Property values can also have a big impact when choosing your best mortgage option, Mr. Jain adds.
“Rising property values can increase your available equity, making refinancing more attractive for accessing funds or consolidating debt,” says Mr. Jain. “If values drop, your refinancing options may be limited, but if you still have enough equity, refinancing could remain valuable. Otherwise, renewing may make more sense.”
Explore your options before you leap
If you are thinking about refinancing or your mortgage is coming up for renewal, there are multiple options to consider when deciding which mortgage is right for you, says Mr. Jain. Features such as interest rate type (fixed or variable), term length, amortization period and prepayment privileges to pay down debt faster can all contribute to a more tailored solution, he says.
CIBC’s innovative digital tools are designed to help clients make confident, informed financial decisions. CIBC’s Digital Switch, for example, enables homeowners to easily compare personalized mortgage options and evaluate what works best for their needs, while CIBC’s GoalPlanner helps clients track their progress and assess how different choices could impact their long-term objectives. Together, these resources provide clients with greater clarity and convenience as they plan for their financial future.
“You can see how your mortgage fits into your bigger plans, whether that’s saving for retirement, managing debt or making room for life’s surprises,” he says.
Regardless of whether you ultimately opt to renew or refinance, Mr. Jain underscores the importance of speaking with an advisor before you make your decision. It’s essential to regularly review your budget and future goals to ensure that your mortgage terms and payments support your broader financial objectives, he says.
“An advisor listens to what matters most to you and helps you adjust your plan as things evolve, making sure that your mortgage keeps working for you.”
Try CIBC’s Digital Switch to get a quick estimate, access competitive rates, and explore customizing options to see how your payments might look. Or, book a meeting with a CIBC advisor today to review your options in detail.
Advertising feature produced by Globe Content Studio with CIBC. The Globe’s editorial department was not involved.