160 Quarry Park Blvd SE, Suite 300 · Calgary, Alberta
160 Quarry Park Blvd SE, Suite 300 · Calgary, Alberta
Home / Real Estate Law / Mortgage Refinancing
Lower your rate, tap your home equity or restructure your payments. Our Calgary lawyers review your new mortgage, register it correctly and protect your home.
Refinancing replaces your existing mortgage with a new one to lower costs, access equity or change your terms.
Mortgage refinancing means paying out your current mortgage with a new one, either with your existing lender or a new lender. As a mortgage refinancing lawyer for Calgary homeowners, OLEX Legal handles the legal side so the new mortgage is registered correctly and the old one is properly discharged.
Common reasons to refinance include:
If you are refinancing as part of a separation, coordinate with your divorce and separation lawyer so the title transfer and refinance close together.
Set your goal, check your current penalty, compare offers, gather documents, then sign and close with your lawyer.
Lender approval commonly takes several weeks from application, so start well before your current term matures or any payment deadline.
Breaking a fixed-rate mortgage early usually costs the higher of three months’ interest or the interest rate differential.
Breaking your mortgage before the end of its term usually triggers a prepayment penalty. For most fixed-rate mortgages, the penalty is the higher of:
Variable-rate mortgages often charge only three months’ interest. IRD calculations vary widely between lenders, and some use posted rates or discounts in ways that make the penalty much larger than expected, especially on big balances with years left in the term.
Always get a written penalty quote before committing to a refinance. A lower rate only helps if the savings outweigh the penalty and other costs.
Alternatives such as a blend-and-extend or waiting until maturity may achieve your goal at lower cost. See the comparison below.
In focus
| Option | Penalty? | Access equity? | Often suits you when |
|---|---|---|---|
| Full refinance, new lender | Usually, if mid-term | Yes, up to 80% LTV | A better rate or terms outweigh the penalty |
| Refinance with current lender | Often, sometimes reduced | Yes, up to 80% LTV | You want equity with less paperwork |
| Blend-and-extend | Usually built into the blended rate | Sometimes | Rates have dropped mid-term |
| Switch at maturity | No | Generally no | You only want a better rate |
| HELOC or second mortgage | No, first mortgage stays | Yes, within lender limits | You want to keep a low first-mortgage rate |
Conventional refinances are generally capped at 80% of your home’s appraised value, and you must still qualify under lender rules.
Your loan-to-value (LTV) ratio compares the mortgage amount with your home’s appraised value. For a conventional refinance, lenders can generally lend up to 80% of the value. Mortgage default insurance is generally not available for refinances, with limited exceptions, so that 80% ceiling usually applies.
For example, if your Calgary home appraises at $600,000, the new mortgage generally cannot exceed $480,000. With $300,000 still owing, you could access up to about $180,000, before penalties and costs.
Lenders also look at:
If you do not qualify with a bank, credit unions and alternative lenders may help, usually at higher cost. We review those offers closely, as fees and terms vary.
We review the mortgage terms, search title, handle Dower consent and independent legal advice, and register and discharge correctly.
The legal side of a refinance protects both you and the lender. Our work typically includes:
Title insurance is also commonly required by lenders on a refinance, and we arrange it where needed.
Plan for the prepayment penalty, appraisal, discharge and registration fees, title insurance and legal fees.
A refinance only makes sense if the benefits outweigh the costs. Typical costs include:
Some lenders offer cash-back or cover certain costs for switching, but those incentives may come with a higher rate or clawback conditions. Ask us to review the fine print. A tax professional can also advise whether interest on borrowed equity may be deductible when funds are used to earn income, since the rules are specific.
Alberta foreclosure is a court process, and you usually have time and options if you act quickly.
If you fall behind on payments, your lender cannot simply take your home. In Alberta, foreclosure is a judicial process through the Court of King’s Bench. It generally unfolds like this:
Under Alberta’s Law of Property Act, lenders generally cannot pursue individual borrowers personally for a shortfall on a conventional residential mortgage, but exceptions apply, including for some insured high-ratio mortgages and corporate borrowers. Read our 5 key steps to navigate foreclosure proceedings.
Talk to your lender early, and consider reinstatement, refinancing, a private sale or court applications before the redemption period ends.
The earlier you act, the more choices you have. Depending on your circumstances, options may include:
Do not ignore court documents. Deadlines to respond are short, and missing them can let the lender proceed without hearing from you.
If you are on the other side and considering buying a foreclosed property, read our guide to foreclosure purchases in Alberta.
FAQs
When does refinancing make sense?
It depends on your situation. Refinancing tends to make sense when the interest savings or benefits of accessing equity clearly outweigh the penalty and costs, and when you plan to stay in the home long enough to benefit. A written penalty quote and a side-by-side comparison of offers are the best starting points.
Can I refinance with poor credit?
Often, yes, though options are narrower. Banks may decline, but credit unions, alternative lenders and private lenders may still lend, usually at higher rates and fees. Review those offers carefully and consider improving your credit before applying if you have time. We review the documents so you understand the true cost.
How often can I refinance my mortgage?
There is no legal limit on how often you can refinance in Alberta, but each refinance brings penalties, appraisal, registration and legal costs. Frequent refinancing can erode the equity you have built. Weigh the long-term benefit each time rather than chasing small rate changes.
What is cash-out refinancing?
A cash-out refinance replaces your existing mortgage with a larger one and pays you the difference. The extra funds can be used for renovations, debt consolidation or other goals. On a conventional refinance, the total new mortgage is generally capped at 80% of your home's appraised value.
How long does foreclosure take in Alberta?
There is no fixed timeline. It depends on how quickly the lender moves, the redemption period the court sets, which turns largely on your equity, and whether you respond or make applications. Some cases resolve within months, while others take longer. Getting legal advice early gives you the most time and options.
Will I owe money after a foreclosure?
It depends on your mortgage. Alberta's Law of Property Act generally protects individual borrowers from being sued for a shortfall on a conventional residential mortgage, but that protection may not apply to some insured high-ratio mortgages, corporate borrowers or guarantors. We can review your documents and explain your exposure.
This information is general and is not legal advice. For advice on your situation, book a consultation.
Book a consultation to review your refinance offer or discuss your options if payments are falling behind.
or call 587-333-4358
