Why Refinancing Your Mortgage in Ontario in June 2025 Is a Smart Move

If you're a homeowner in Ontario, June 2025 presents a compelling opportunity to refinance your mortgage. With interest rates on a downward trend and new policies easing the refinancing process, acting now could lead to significant financial benefits.

1. Capitalize on Lower Interest Rates

The Bank of Canada has been reducing its policy interest rate, currently at 2.75%, with expectations of further cuts to 2.5% in June and 2.25% in July . This downward trend is reflected in mortgage rates, with five-year fixed rates available as low as 4.15% . Refinancing now allows you to lock in these lower rates, potentially saving thousands over the life of your mortgage.

2. Access Home Equity for Financial Flexibility

Ontario's housing market has remained robust, with home values appreciating steadily. Refinancing enables you to tap into this increased equity, providing funds for renovations, education, or debt consolidation. This can be a cost-effective way to access capital, especially compared to higher-interest credit options.

3. Benefit from Regulatory Changes

Recent regulatory adjustments have made refinancing more accessible. As of November 2024, borrowers can switch lenders at renewal without undergoing a new mortgage stress test, simplifying the process and potentially leading to better rates . Additionally, the introduction of 30-year amortizations for insured mortgages on new builds provides more flexibility for homeowners.

4. Avoid Payment Shock at Renewal

Approximately 1.2 million Canadian mortgages are up for renewal in 2025, many of which were secured at historically low rates . Refinancing now can help you avoid the potential payment shock of higher rates at renewal, allowing you to plan your finances with greater certainty.

5. Shorten Your Loan Term

With lower interest rates, refinancing offers the opportunity to shorten your mortgage term without significantly increasing your monthly payments. This means you can pay off your mortgage faster and save on interest over time.

Considerations Before Refinancing

While the current environment is favorable, it's essential to consider:

• Prepayment Penalties: Refinancing before your current term ends may incur penalties.

• Qualification Criteria: You'll need to requalify for the new mortgage, which includes income verification and credit assessment.

• Closing Costs: Be prepared for legal and administrative fees associated with refinancing.

June 2025 offers a unique window for Ontario homeowners to refinance their mortgages advantageously. By acting now, you can lock in lower rates, access home equity, and position yourself for long-term financial stability. Consult with an agent at The Mortgage Division to explore your options and determine the best course of action for your specific situation.