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My Available Capital

To refinance your mortgage, the first step is making sure that your equity is higher than 20% of your property’s current market value. Your equity is the current market value of your property minus the balance of your current financing. This is where the current market value of your home really counts.

Let’s say that a few years ago you purchased a $150,000 home with $30,000 down. Since then, you have paid back $20,000 on your mortgage loan, which is now at $100,000. Your equity is therefore $50,000 ($150,000 minus $100,000).

However, the value of your home has risen since you bought it and is now worth $200,000. What would your equity be now? Check out the following table.

Refinancing Calculation Table for a House
Purchase value $150,000
Down payment $30,000
Repayment of the capital $20,000
Mortgage loan balance $100,000
Equity available for financing based on value at purchase $20,000
Current market value of home $200,000
Amount available (maximum 80% of the market value) $160,000
Mortgage balance $100,000
Equity available for financing based on current market value $60,000

Because the value of your home has gone up, your equity available for financing has also risen from $20,000 to $60,000.

If you have paid back at least 20% of the current market value of your home and you have some projects in mind, look into our Homeowner's Kit.

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