Make your mortgage work for your goals

If you find yourself juggling multiple-high interest payments, then simplifying your finances and reducing interest costs could be something to consider. Managing your debt effectively can help you stay in control of your finances. 

How it works

Interest rates on mortgages and secured lines of credit are typically lower than credit card and unsecured loan rates. If it makes sense for your individual situation, consolidating your debts into a lower-interest payment could help reduce your monthly payments and make repayments more manageable. However, keep in mind that extending your repayment period may increase the total interest paid over time.

Start by understanding what you owe 

Take a detailed look at your finances and outstanding debt. Add up your total debt to get a sense of how much you might need to pay off and how much you want to borrow. Knowing how much you owe can help you explore ways to reduce costs and simplify your payments. 

Explore refinancing to unlock your home equity and improve cash flow

As you pay off your mortgage you build home equity, which may give you options to better support your goals. Refinancing lets you borrow up to 80% of your home’s current value minus how much you still owe on your property. For example, if your home is currently worth $300,000, you can borrow up to $240,000 which is 80% of your home value. To calculate your equity: 

1. Find out your home’s current value (not the original purchase price) 
2. Find your mortgage balance (how much you still owe)
3. Subtract your mortgage balance from your home’s current value  

Keep in mind that in order to refinance your mortgage you’ll need to submit an application to your bank to prove your financial standing and determine the amount you can borrow. 

The cost of major purchases or unexpected expenses can sometimes lead to financial stress. If your financial situation allows for it, you may be able to use your home’s equity to ensure you’re prepared for unexpected financial surprises.

Refinance your mortgage

• Conventional mortgage refinance¹
  As you pay down your mortgage you build equity in your home. Refinancing lets you borrow up to 80% of your home’s current value minus how much you still owe on your property. For example, if your home is currently worth $300,000, you may be able to borrow up to $240,000 which is 80% of your home value. Keep in mind that in order to refinance your mortgage you’ll need to submit an application to your bank to prove your financial standing and determine the amount you can borrow. Learn more about mortgage refinancing
• Convert your mortgage to a Homeowner ReadiLine^®
  A BMO Homeowner ReadiLine² combines a mortgage with the flexibility of a revolving line of credit, providing flexible access to fund big purchases or emergencies. With responsible use and regular payments, you can manage your borrowing as needed. Learn more about a Homeowner ReadiLine^®

Add a Homeowner’s Line of Credit

A stand-alone revolving line of credit that allows you to borrow up to 65% of your home’s value. Consider a BMO Homeowner’s Line of Credit³ if you want to avoid prepayment penalties or don’t want to alter your existing mortgage. Learn more about a Homeowner’s Line of Credit

Moving can be a lot of work, but we can help remove the financial stress. You can transfer your existing BMO fixed-rate closed mortgage to your new home and keep your competitive rate without incurring prepayment penalties.⁴

Take your current mortgage with you

If you have a competitive interest rate and don’t need to borrow additional funds, a BMO Simple Portable Mortgage allows you to transfer the remaining term and existing rate of your current BMO mortgage to a new property without incurring a prepayment charge. 

Adjust your mortgage term to borrow additional funds

• Blend & Extend Portable Mortgage
  This is a great option if you need to borrow additional funds⁷ to purchase your new home and want to extend your existing term while potentially avoiding a prepayment charge.⁴
• Blended Portable Mortgage
  This option will best suit you if you need to borrow additional funds⁷ to purchase your new home and want to keep your remaining term without incurring a prepayment charge.

Most lenders offer options to pay-off your mortgage sooner, but BMO customers have access to market leading features that help you manage your mortgage and pay it off faster.

What are my options?

• Make a lump sum payment⁸
  A lump sum payment is a one-time payment you make toward your mortgage, outside of your regular payments. With most BMO mortgages you can make a lump sum payment of up to 20% of the original mortgage amount (minimum of $100) once per calendar year with no prepayment charge.
• Increase your payment amount⁸
  If budget allows, consider increasing your regularly scheduled payment amount. Even a small change can go a long way toward paying off your principal faster. With most BMO mortgages you can increase your mortgage payment once per calendar year by up to 20% of your current payment amount.
  
  Some lenders may only allow you to combine the maximum amounts from the options listed above. At BMO you have the freedom to make a lump sum payment of up to 20% on top of increasing your payment amount by up to 20%, without either option eating into the other. Follow along with our interactive demo to learn how to make extra mortgage payments on BMO Online Banking. 

• Pay more frequently
  By switching from monthly mortgage payments to an accelerated weekly or bi-weekly schedule, you can become mortgage-free faster and save thousands. Access our mortgage renewal calculator to calculate your options.