Mortgage Refinancing in Alberta

Refinancing means replacing your current mortgage with a new one, usually for a larger amount, and taking the difference in cash. People do it to consolidate higher-interest debt, pay for a renovation, or restructure a mortgage that no longer fits the life they have now.

It is not always the right answer. Sometimes waiting for your renewal costs you less. The point of the conversation is to find out which one your numbers support, before you commit to anything.

Common reasons clients refinance

• Consolidating higher-interest debt. Credit cards, lines of credit and vehicle loans carry very different interest rates than a mortgage. Moving them into the mortgage can lower the total monthly obligation, though it also stretches that debt over a much longer period, which is part of what we look at together.
• Accessing equity for a renovation or another large expense, rather than borrowing at unsecured rates.
• Building a legal secondary suite. There is now a specific insured refinance for this, with its own rules. More on that below.
• Changing the amortization or payment structure so the payment matches your income instead of fighting it.
• Buying out a partner or restructuring after a separation, a death, or another change in who is on title.

How much you can borrow

A standard refinance is capped at 80% of what your home is worth. So if your home appraises at $500,000, the new mortgage cannot exceed $400,000, and any existing mortgage balance comes out of that figure first.

A refinance is also not an insured mortgage, which is why refinance pricing generally sits above purchase pricing. If that distinction is new to you, the Rates Explained page sets out the pricing categories and where each type of file lands.

The one exception: building a suite

Since January 15, 2025, there has been an insured refinance specifically for adding a legal secondary suite. It goes up to 90% of what the property will be worth once the suite is built, on a property valued under $2 million, with amortization up to 30 years. The money can only be spent on building the suite, and the insurer has to approve the financing before construction starts.

Not every lender offers it. I have written up the full rules, including what the City of Edmonton allows, in Thinking About a Basement Suite? What the Refinance Rules Allow.

What it costs to break your current mortgage

Refinancing in the middle of a term means breaking your existing mortgage contract, and that comes with costs worth knowing before you start:

• A prepayment penalty, usually the higher of three months’ interest on the balance or the interest rate differential.
• Legal and discharge fees to remove the old mortgage and register the new one.
• An appraisal, because the whole calculation rests on what the property is worth.
• Repayment of any cash back you received when you signed the current mortgage.

Those costs are exactly why the honest answer is sometimes to wait. If your term ends within the next year, compare refinancing now against doing the same thing at renewal, when there is no penalty at all. That comparison is on the mortgage renewals page.

How it works

1. A conversation. What has changed, what you are trying to accomplish, and what your current mortgage looks like.
2. The numbers. Your equity, your income, your existing debts and what the penalty would actually be. I will ask your current lender’s exact penalty figure rather than estimating it.
3. The options, side by side. Refinance now, wait for renewal, or a different structure altogether. If refinancing does not improve your position, I will tell you that.

What to have handy

Nothing is required for a first conversation. When you are ready to look at real numbers, these help: your current mortgage statement, your renewal date, a rough list of the debts you are thinking of consolidating with their balances and payments, and a sense of what your home might be worth. The mortgage calculator on the homepage is a quick way to test what a new balance would do to your payment before we ever speak.

Every file is different, and qualification depends on your income, credit, property and existing debts. I am a licensed mortgage associate with Mortgage Connection, and I work with multiple lenders, so the question is which lender’s rules fit your situation rather than which product I happen to have.

Let’s look at your numbers

A short conversation is usually enough to know whether refinancing is worth pursuing. There is no cost to finding out.