10/16/2026
"Is refinancing to clear my debt the wrong thing to do?"
Absolutely not. But the honest math has three caveats the ads skip.
A hypothetical: Home worth $1M, mortgage of $500K. In Canada, you can generally refinance up to 80% of your home's value, which means up to $300K of accessible equity in this example, subject to qualification.
And the payment math can be dramatic. Credit cards often carry interest rates of 20% or more, so payments on $80K of mixed consumer debt can easily exceed $2,000 a month. Consolidating that debt into a mortgage at a lower interest rate could reduce monthly payments significantly.
So why isn't this automatic advice?
First, you're stretching short-term debt over a longer amortization. Lower monthly payments don't necessarily mean lower total interest costs. The strategy works best when the freed-up cash goes toward paying down debt faster or rebuilding savings, not lifestyle spending.
Second, breaking your current mortgage may trigger a penalty. Sometimes it's worth it. Sometimes waiting until renewal is smarter. Run the math, never assume.
Third, the debt had a cause. If spending habits don't change, the credit cards can fill up again, leaving you with more mortgage debt and less equity.
Hypothetical example for illustration only. Rates, penalties, qualification, and available equity vary by lender and individual circumstances.
Own a home and drowning in payments? It costs nothing to have the numbers run properly. DM us.
Dominion Lending Centres North Power Mortgages
30 Saint Patrick Street, Unit 310
Toronto, ON M5T 3A3
FSRA Lic #13625
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+1 647-347-4100
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