Refinancing or Switching Your Mortgage in BC: What You Should Know

By Jen Lowe – Mortgage Broker

Whether you’re trying to save money, access equity, or simplify your finances, refinancing or switching your mortgage are two powerful options — but they’re often misunderstood.

Every homeowner’s situation is unique, especially here in British Columbia where markets, property values, and rates vary widely from the Lower Mainland to Vancouver Island and the Interior. So let’s break it down clearly — what each option is, when it makes sense, and how to decide what’s right for you.

What Is Refinance vs. Mortgage Switch?

Refinancing Your Mortgage

Refinancing means replacing your existing mortgage with a new one — usually with a different principal amount, interest rate, term, or lender.

You might refinance to:
✔ Get a lower interest rate
✔ Access equity (cash out)
✔ Consolidate debt
✔ Change amortization
✔ Fund renovations or other goals

Refinancing rewrites your mortgage, which can impact your monthly payments and long-term costs.

Switching Your Mortgage

Switching means moving your mortgage from one lender to another — but keeping essentially the same mortgage amount.

It’s often done when:
✔ Your current lender won’t beat a competitor’s rate
✔ You want better service or different features
✔ You’re approaching renewal and want a better fit

It can often be simpler than a refinance — but it still requires qualification and a deal that’s actually worth the move.

Why Homeowners in BC Refinance or Switch

Here are scenarios where refinancing or switching can be smart:

1. Interest Rates Drop After You Locked In

If rates have dropped since you took your mortgage, refinancing or switching might save you thousands in interest over time.

But you need to look beyond rate alone — penalties, fees, and break costs matter too.

2. You Want to Access Home Equity

Maybe your home value has gone up. You want to:

• Renovate

• Consolidate high-interest debt

• Invest in another property

• Cover an emergency

Refinancing can unlock that equity — but the key is ensuring it makes sense for your goals and doesn’t put you at risk.

3. Your Needs Have Changed

Maybe you:

• Need to shorten your amortization

• Want to refinance into a fixed or variable rate

• Want to blend and extend your current rate

• Are self-employed now and need different documentation

If your financial situation changes, the mortgage that worked before may not be ideal anymore.

How Refinancing Works in BC

Step 1: Review Your Current Mortgage
We look at:

• Your interest rate

• Remaining balance

• Term left

• Penalties and fees

• Current lender restrictions

Step 2: Evaluate Your Goal
Are you trying to save money? Access equity? Shorten amortization? Consolidate debt?

Your goal determines the best path.

Step 3: Shop Lenders & Options
Different lenders will look at your file differently — especially if your income, credit or equity has changed since you last borrowed.

Step 4: Calculate True Savings
You need to compare:

• The total cost of breaking your current mortgage

• Versus future savings with the new mortgage

If you’re saving less than the break cost, the move may not be worth it — even with a lower rate.

Step 5: Close the New Mortgage
If the numbers make sense, we finalize the refinance and you move forward with confidence.

Switching: A Simpler Alternative

Switching your mortgage rather than refinancing can be a good choice when:

• You want a better rate

• You don’t need equity out

• You’re not changing amortization or terms much

Switching still requires underwriting — but typically has:
✔ Fewer changes to your mortgage structure
✔ Fewer costs than refinancing
✔ A cleaner process

However — like refinancing — it’s not free. Legal fees, payout statements, and administrative costs still apply.

Real Costs to Understand

When you refinance or switch, here are common costs you may encounter:

Break Penalties

If you’re ending a mortgage early you may owe a penalty — depending on your lender and term.

Legal Fees

New mortgage = new legal work.

Appraisal Fees

Lenders often require a current appraisal.

Title or Registry Fees

These apply when transferring or replacing the mortgage on title.

It’s critical to weigh these against your projected savings.

When Refinancing or Switching Doesn’t Make Sense

Don’t do it just because:
❌ Someone quoted a slightly lower rate
❌ You don’t have a clear financial goal
❌ You haven’t calculated break costs

If the break costs outweigh your savings, you’re effectively paying to lose money.

Instead, focus on:

• Whether your financial goals are served

• Whether your cash flow and long-term costs improve

• Whether your risk exposure is reduced

Why Working with a Broker Helps

Lenders price mortgage products differently:

• Some offer better rates for refinancing

• Some have unique switch products

• Some will see your file in a way others don’t

A broker:
✔ Shops dozens of lenders
✔ Finds the smartest structure for your goals
✔ Calculates break costs accurately
✔ Frames your options clearly (no guesswork)

This is especially valuable in BC’s diverse marketplace where values and conditions vary from region to region — Vancouver, the Fraser Valley, Vancouver Island, the Interior, and the North all behave differently.

A Simple Plan to Decide What’s Best

1. Clarify your goal (save money now? save long term? extract equity?)

2. Get your current numbers (balance, rate, term, amortization)

3. Calculate the real cost of change

4. Compare multiple options

5. Choose the path that improves your situation

Final Thoughts

Refinancing or switching your mortgage can be a powerful tool for BC homeowners — but only when done with clarity and purpose.

There’s no one-size-fits-all answer — and the best decision for you depends on your:
✔ Financial goals
✔ Current mortgage details
✔ Future plans
✔ Cash flow
✔ Risk tolerance

Need Help Evaluating Your Mortgage Options?

I’m Jen Lowe, Mortgage Broker, and I help BC homeowners navigate refinancing and mortgage switches every day. We’ll break down the numbers, explore your goals, and decide whether now is the right time — or whether you’re better off waiting.

Reach out and let’s build a plan that works for you — not against you.