Hi there, I'm looking for some advice please.

What is the easiest way to pull equity out of a rental property when your mortgage term is coming to an end. Does a person need to re-apply for financing for the mortgage to be able to pull out the equity that is in excess of 20%? or can you still pull out the excess equity when you chose to just extend your financing term?
I have already confirmed that upon renewal of my mortgage term I cannot switch the mortgage to a ratio loan(5% down).

I also have another property that was my principle residence but now is a rental and it is coming up for renewal, if there is less than 20% paid down on the mortgage do I now need to come up with at minimum 20% to re-finance the mortgage?


Thank you

You can pull cash out if new 80% loan is approved based on your income and property value AND if it exceeds existing mortgage.

Most lenders will allow you to extend existing loan. If loan went from Y to X they give you good terms on X usually, especially if you have a CMHC certificate. However some lenders want their money back ( unusual though ) and then you may have to top it up as only 80% is allowed for rentals. What lender is it ? Did they offer you new terms as most banks send a renewal sheet with various 1-5 year options for you to chose ?

If looking to pull equity out of rental OR refinance a brand new application and FULL review would be required to ensure affordability for lender. You’re essentially asking lender for more money so they’ll want to re-qualify, whereas a regular refinance your keeping existing balance and simply renewing term.

For a refinance lenders will only consider up to 80% LTV of appraisal value. If there is less equity in property a refinance isn’t generally available with traditional lenders (perhaps private lenders in some cases).

Depending how much equity you have banks will also lend on assessment value. Usually only to 65% of value but that is an inexpensive way to pull equity out if you have enough and you won't need an appraisal to do it.