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What Are Some Other Mortgage Refinancing Options?

June 01, 2016

Bridging loan, construction loan and equity loan.

Many people refinance their home loan because they’re looking for a lower interest rate, lower payments or more flexibility. If that is your goal in refinancing, then you have a wide range of products to choose from. However here we look at some specific mortgage refinancing options people use to deal with some common situations.

  • Bridging loan
  • Construction loan
  • Equity loan or line of credit (LOC)
  • All in one account
  • Bridging loan

If you want to buy a new home, but you have not yet sold your existing home, you could use a bridging loan to tide you over. The maximum you will be allowed to borrow during the bridging period is generally limited to 80% of the combined value of both properties. Bridging loans tend to be at a higher interest rate than normal loans. But when you have sold your original home and repaid that mortgage, you can revert to a loan product with a more favourable rate.

Construction loan or renovation loan

With a normal loan, you borrow the whole amount up front – and start paying interest from day one. The advantage of a construction loan or renovation loan is that you only draw down money as you need it to make progress payments. This can significantly reduce your interest payments.

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