Refinance
GeneralReplacing an existing loan with a new one, usually to get a lower interest rate or different terms. Refinancing can reduce your monthly payments, but watch for penalties on the old loan and fees on the new one.
Related terms
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Mortgage
A loan specifically for buying property, where the property itself serves as collateral. In Canada, mortgages typically have 5-year terms within a longer 25-year amortization. On-reserve, Ministerial Loan Guarantees may be required.
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Interest rate
The percentage a lender charges you to borrow money, or the percentage a bank pays you for keeping money in a savings account. Lower rates are better for borrowing; higher rates are better for saving.
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Fixed rate
An interest rate that stays the same for the entire term of the loan or mortgage. Fixed rates provide certainty — your payment amount will not change — but may start higher than variable rates.