What Does It Actually Cost to Refinance?

Refinancing can save you money, but it's not entirely free to do. Understanding the costs upfront means there are no surprises, and it helps you figure out whether the savings are actually worth it. Here's a simple, honest breakdown.

The main costs to know about

A fee for breaking your current mortgage early: If you're refinancing before your current term ends, your existing lender may charge a fee for ending the agreement early. This is one of the bigger costs to factor in, and it varies depending on your specific mortgage.

Legal fees: Refinancing involves some paperwork and legal steps, similar to when you first bought your home, which usually comes with a legal fee.

Appraisal fees: Lenders often want an updated idea of what your home is worth, which may mean paying for a home appraisal.

Administration or discharge fees: Smaller fees from your current or new lender to process the paperwork and officially close out the old mortgage.

So is it worth it?

This is really the key question, and the answer depends on your numbers. A simple way to think about it:

• Add up the total costs involved in refinancing
• Compare that to how much you'd save each month with your new mortgage
• Figure out how many months it would take for the savings to cover the costs

If the savings add up faster than the costs, refinancing is likely a smart move. If it would take many years to break even, it might be worth waiting or exploring other options.

Costs vary a lot from person to person

The fee for breaking your mortgage early, in particular, can vary quite a bit depending on your specific lender and mortgage type. This is exactly why a personalized cost breakdown matters more than a general estimate.

Get the real numbers before deciding

The best way to know if refinancing makes financial sense for you is to see your actual costs and savings side by side. Reach out to Ken Tucker to discuss your unique situation, and get a clear, honest breakdown with no surprises.

Book a free call by clicking here or call 416-988-5626.

Learn more about how refinancing can help in our Refinance blog series here.