Let us suppose that you are a person who is paying off a mortgage, but you have just signed a four-year lease contract for the brand new car you’ve always wanted to have; in addition, you have bought a brand new home entertainment system with a big flat screen TV and five or six awesome speakers… All of a sudden, you find yourself paying off a whole bunch of monthly instalments to several different banks, and the soaring interests rates are just ripping off your pocket. The solution to your woes is refinancing. In a nutshell, refinancing means that you draw a bank loan to pay off several older debts that you had incurred and, if approved, you end up paying just one, but not several, monthly instalment to one bank. Moreover, you also save a whole lot of money on lower interest rate. Alternatively, you may opt for refinancing if you are half way into repaying an old loan, and you have just spotted a better loan offer with a much lower interest rate. So, you can apply for refinancing with that other bank and, if approved, you pay off your old loan, saving a considerable amount of money on lower interest rate. The text below examines the refinancing options offered by Canada’s five biggest banks – the Bank of Nova Scotia, Bank of Montreal, the Royal Bank of Canada, the Canadian Imperial Bank of Commerce, and the Toronto Dominion Bank.
The Bank of Montreal offers to its costumers a set of flexible mortgage refinancing solutions which could be especially useful to those planning a major renovation of their house or apartment. The refinancing options of the Bank of Montreal include personal loans and lines of credit, preferential-rate credit lines for homeowners, along with a broad variety of convenient equity loans.
The team of the Royal Bank of Canada has developed a convenient refinancing solution for homebuyers called “Mortgage Add-on Option”. This refinancing tool allows clients of RBC (those who have signed a mortgage agreement with the bank) to borrow up to ninety-five percent of the appraised value of their home minus the remaining balance on their mortgage.
The Canadian Imperial Bank of Commerce (CIBC) has developed a refinancing instrument called CIBC Home Power Mortgage, which allows homeowners to borrow extra funds against the equity they have built up in their home. This product is intended for individuals who want to consolidate their debt at lower interest rates and at the same time need additional financing (for purchase of vehicle, vacation, home repairs and renovation, covering education costs for children, etc.). The banks’ experts claim that with this product, the interest rate is lower than most banking institutions offer.
The clients of the Toronto Dominion Bank (TD Bank) who want to reduce or consolidate their overall debt may apply for a second mortgage or home equity loan and, if approved, use the money to take a vacation, renovate their home, or search for different investment opportunities.