DecideGuide
What does refinancing to consolidate debt really cost?
Penalty, notary, appraisal, lender and broker fees: what a refinance to consolidate debt costs, and how those costs are paid.
In brief
The main refinancing costs are the penalty for ending your current mortgage, the notary and, depending on the file, the home appraisal, lender fees and the broker’s fees. At ZenFi, these costs are usually included in the new loan, and our fees are only due if your loan is funded; the only possible expense before that is the home appraisal. Always ask for the total before you decide.
The number to remember
3 months’ interest
That’s the usual penalty for ending a closed variable-rate mortgage. With a fixed rate, institutions generally charge the higher of this amount or the interest rate differential: the gap between the interest left to pay until the end of the term, calculated at your rate and at the current rate.1 8
How does it work?
Here are the costs to plan for. Not all of them apply to every file.
The notary
In Quebec, a mortgage must be signed in front of a notary. The notary checks the titles, gets the balances to pay off and registers the new mortgage. Notary fees depend on the time spent, how complex the file is and the notary’s expertise: ask for an estimate. On top of that come disbursements, such as land register publication fees.3 4
The home appraisal
The lender may require an appraisal to set the value of your home, before the loan is funded. You can pay for it yourself: it’s the only real risk, because if the file doesn’t go through, that amount isn’t refunded. If you can’t advance it, ZenFi can do it for you, for a fee that is clearly disclosed to you beforehand.5 7
The broker’s fees
Before serving you, a mortgage broker must explain in writing how they are paid: what you’ll pay, when, and whether they get a commission from the lender. At ZenFi, part of what we earn comes from the banking institutions and part is paid by the client, only if your loan is funded, meaning once the funds are paid out.6 7
Put every cost on paper, then add it all up before you decide.
Example
Made-up example
What the new loan becomes
Hélène and Marc have a closed mortgage. They want to pay off their credit cards, their line of credit and their car loan by refinancing.
On signing day, the penalty and the costs are paid out of the loan: nothing comes out of their pocket that day.
But those costs are now part of the mortgage: they pay them back with interest, over the whole life of the loan.
The new loan, costs included, must generally stay under 80% of their home’s value.
Made-up example, to show how the new loan is built. The actual penalty and costs depend on your contract, your lender and your file.
What are the downsides, and when isn’t it the right option?
- Costs added to the loan don’t disappear: you pay them back with interest, often over a long period.
- With a fixed rate, the penalty is often calculated with the interest rate differential if your rate is higher than the current rate and you signed less than 5 years ago. It can then be high.
- If your debts are small compared with the costs, the math may not be worth it. Add it all up before you sign.
- A refinance doesn’t erase your debts: it moves them into the mortgage, secured by your home. If you can no longer pay, your home is at stake.8 5
Frequently asked questions
How much does it cost to refinance a mortgage?
The main refinancing costs are the penalty for ending your current mortgage, the notary and, depending on the file, the home appraisal, lender fees and the broker’s fees. Always ask for the total before you decide.
What is the penalty for breaking a mortgage?
For a closed variable-rate mortgage, the usual penalty is 3 months’ interest. With a fixed rate, institutions generally charge the higher of that amount or the interest rate differential: the gap between the interest left to pay until the end of the term, calculated at your rate and at the current rate.
When do you pay ZenFi’s fees?
At ZenFi, the costs are usually included in the new loan, and our fees are only due if your loan is funded; the only possible expense before that is the home appraisal.
Sources
- Autorité des marchés financiers (AMF), “Les pénalités à acquitter pour mettre fin à l’hypothèque” (opens in a new tab) (in French), consulted on September 25, 2026.
- Financial Consumer Agency of Canada (FCAC), “Breaking your mortgage contract” (opens in a new tab), consulted on September 25, 2026.
- Chambre des notaires du Québec, “Parlons refinancement hypothécaire” (opens in a new tab) (in French), consulted on September 25, 2026.
- Chambre des notaires du Québec, “Les honoraires du notaire” (opens in a new tab) (in French), consulted on September 25, 2026.
- FCAC, “Borrowing against home equity” (opens in a new tab), consulted on September 25, 2026.
- AMF, “Le courtier hypothécaire résidentiel” (opens in a new tab) (in French), consulted on September 25, 2026.
- ZenFi, “Frequently asked questions” (opens in a new tab), consulted on September 25, 2026.
- FCAC, “Mortgage fees: Prepayment penalties” (opens in a new tab), consulted on September 25, 2026.
Sources checked on September 25, 2026. The examples illustrate a calculation; they don’t promise a result.
This guide gives general information, not advice tailored to your situation. Terms vary from one lender and one file to the next.
This guide is a translation of the French version, which is the reference text.
Groupe ZenFi (9498-0356 Québec inc.), a Quebec mortgage brokerage firm registered with the Autorité des marchés financiers (AMF), client number 3003043028.
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