Appendix ID: mortgage-refinance-planning-guide
Step 1 — Define the objective
- [ ] Lower payment
- [ ] Lower total cost
- [ ] Debt consolidation
- [ ] Home improvement
- [ ] Investment/business purpose
- [ ] CRA/tax payout
- [ ] Spousal/partner buyout
- [ ] Private mortgage exit
- [ ] Change borrower/title
- [ ] Maturity solution
Step 2 — Calculate the full required mortgage
| Use of funds | Amount |
|---|---|
| First mortgage payout | |
| HELOC payout | |
| Second/private mortgage payout | |
| Penalty | |
| Consumer debts | |
| Tax/property/condo arrears | |
| Cash required | |
| Lender/brokerage fees | |
| Legal/appraisal/discharge costs | |
| Reserve/holdback | |
| Total mortgage required |
Step 3 — Equity test
Resulting LTV = Total secured debt after closing ÷ Accepted property value × 100
| Value scenario | Value | Resulting LTV |
|---|---|---|
| Borrower estimate | ||
| Conservative estimate | ||
| Appraised/accepted value | ||
| 10% stress decline |
Step 4 — Qualification and suitability
- [ ] Income supports qualifying payment
- [ ] Actual household budget supports payment
- [ ] Credit event is explained
- [ ] Debt payout improves cash flow
- [ ] Cards/lines will be closed or managed
- [ ] Emergency reserve remains
- [ ] Holding period exceeds break-even
- [ ] Tax advice obtained for claimed deductibility
- [ ] First-mortgage preservation alternatives compared
- [ ] Private/alternative exit documented where applicable
Step 5 — Break-even
| Item | Current | Proposed |
|---|---|---|
| Mortgage payment | ||
| Other debt payments | ||
| Total monthly payments | ||
| Monthly cash-flow difference | ||
| Upfront cost | ||
| Break-even months | ||
| Balance after holding period | ||
| Total cost after holding period |
Step 6 — Behavioural safeguards
- [ ] Revolving accounts reduced/closed
- [ ] Automatic payment established
- [ ] Automatic savings established
- [ ] 90-day and annual review scheduled
- [ ] No re-borrowing without written budget review
- [ ] Property-maintenance reserve funded
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