Cash-Out Refinance in Ontario
If you’ve been researching “cash-out refinance,” here’s the Canadian translation: in Ontario, this is called an equity takeout refinance. Same idea, different name. You replace your current mortgage with a larger one and take the difference in cash — money you can use for almost anything.
What Is a Cash-Out Refinance?
A cash-out refinance (equity takeout) lets you borrow against the equity you’ve built in your home. Say your home is worth $700,000 and you owe $400,000. You have $300,000 in equity. Refinancing lets you access a portion of that — up to 80% of your home’s value in total borrowing.
In the example above: 80% of $700,000 is $560,000. Subtract the $400,000 you owe, and you could potentially access up to $160,000.
What Can You Use the Money For?
Common uses for a cash-out refinance in Ontario:
- Paying off high-interest debt — credit cards, lines of credit, car loans
- Home renovations — kitchen, bathroom, basement, addition
- Investment property down payment — using your equity to buy a rental
- Education costs — tuition for you or your kids
- Major expenses — without selling your home
Cash-Out Refinance Requirements in Ontario
Lenders typically look at:
1. Enough equity — you need to keep at least 20% equity in your home (the 80% rule)
2. Income — proof you can carry the larger mortgage payment
3. Credit — requirements vary by lender; alternative and private lenders work with a wider range
4. Property value — confirmed by appraisal in most cases
Don’t meet the bank’s checklist? That doesn’t mean you’re out of options. As a mortgage broker, we work with 50+ lenders — including alternative and private lenders with more flexible requirements.
Cash-Out Refinance vs. Second Mortgage vs. HELOC
- Cash-out (equity takeout) refinance: replaces your mortgage with a bigger one. One payment, often the lowest rate of the three options.
- Second mortgage: a separate loan on top of your existing mortgage. Your first mortgage stays untouched — useful if your current rate is great and you don’t want to break it.
- HELOC: a revolving line of credit secured against your home. Flexible, but usually a variable rate.
Not sure which fits? That’s exactly what a free consultation is for.
How the Process Works
1. We review your situation — current mortgage, home value, goals
2. We compare 50+ lenders — banks, alternative, and private
3. You choose the best fit — rate, terms, and structure that work for you
4. Funds are released — typically 2–4 weeks from application
Frequently Asked Questions
How much equity can I take out of my home?
In Ontario, you can generally borrow up to 80% of your home’s appraised value, minus what you still owe on your mortgage.
Is a cash-out refinance the same as an equity takeout?
Yes — “cash-out refinance” is the American term. In Canada, lenders and brokers call it an equity takeout refinance.
Will I pay a penalty for breaking my current mortgage?
Possibly, if you’re mid-term. We calculate whether the penalty is worth it — sometimes waiting until renewal, or using a second mortgage instead, saves you money.
Can I do a cash-out refinance with bad credit?
Traditional banks may say no, but alternative and private lenders look at the whole picture — especially your equity. Learn about bad-credit second mortgage options.
How long does it take?
Typically 2–4 weeks from a complete application to funds in your account.
ABC Mortgages — Mortgage Broker in Pickering, Ontario. Principal Broker Lic. #M13001328.
Ready to put your equity to work? Apply now or call 647-627-8648 (direct) / 1-800-820-5188 (toll-free). Free consultation, zero pressure.
Related: Equity Takeout & Second Mortgages · Second Mortgages in Ontario · Debt Consolidation Mortgage · HELOC vs Second Mortgage vs Refinance