Your equity is real money — here's the cheapest way to reach it.
Two ways to pull cash out of a property: break the mortgage for a bigger first, or leave it alone and add a second behind it. One has a penalty, the other a higher rate — and the winner changes with your numbers. This calculator prices both paths to the dollar: penalty estimate, our published financing fees, legal, appraisal — down to net cash in hand.
Your property
Second mortgages go to 75% combined for detached homes and townhomes in Metro Vancouver, the Fraser Valley, select Okanagan, Greater Victoria and Nanaimo. Outside the footprint, maximums step down — that's placement work.
Your existing mortgage (for the penalty estimate)
Quick estimate: variable = 3 months' interest; fixed = the larger of 3 months or fair-method IRD. Run your lender's exact method →
The new money
Seconds are interest-only and price by combined LTV and story.
The most net cash your equity can release today — after every penalty, fee and legal cost — via Path A: breaking into a new first mortgage.
Path A — break & replace
Most cash- New first mortgage (80% of value)
- $960,000
- Pays off your current balance
- − $400,000
- Penalty estimate (IRD (fair))
- − $6,067
- Financing fees (lender-paid: $0)
- − $0
- Legal + appraisal
- − $3,000
- NET CASH IN HAND
- $550,933
- New monthly payment
- $4,425 (+$1,895 vs today)
- Added monthly cost per $100K raised
- $344
Path B — keep your first, add a second
- Second mortgage room (to 75% combined)
- $500,000
- No penalty — your first stays untouched
- $0
- Financing fees (per our fee schedule)
- − $15,000
- Legal + appraisal
- − $2,300
- NET CASH IN HAND
- $482,700
- Monthly add (interest-only)
- $4,163 on top of your $2,530
- Added monthly cost per $100K raised
- $862
How to read this
- Residential through an A lender costs no financing fees at all — the lender pays us. Commercial always carries fees (brokerage from 1%, $10,000 minimum) because commercial lenders don't pay broker compensation.
- The money is tax-free. Pulling equity out is borrowing against your own asset — it's not income, so it triggers no tax. (Interest can even become deductible when the cash is invested to earn income.)
- Cheapest time: renewal. Best time: when you need it. A new mortgage funding on your maturity date pays zero penalty (lockable 120 days ahead — tick the renewal box above). But urgent money — CRA about to lien, a deposit deadline, payroll — costs more to miss than any penalty, and the second-mortgage path never has one.
- Break when the penalty is small or your rate is high — a new first at today's rates can raise more cash AND sometimes lower the payment, since the whole balance reprices.
- Keep the first when it's a rate worth protecting or the IRD is brutal — the second costs more per dollar, but only on the new money, and your first stays exactly as it is.
- Before signing any second, run it through the Mortgage APR calculator — the true all-in cost over the months you'll actually keep it.
- Using the cash to kill expensive debts? The blended-rate calculator shows what your current debt pile really costs.
Penalty is an estimate (fair-method IRD / 3-month interest) — big-bank posted-rate IRD can run higher; the penalty calculator prices both methods. Fees shown are our published ranges (fee schedule) and include the minimums that apply on smaller amounts — brokerage from $2,500 residential / $10,000 commercial, private lender fees from about $2,500 residential — every real file is quoted in writing before you sign. Second-mortgage maximums shown apply in Metro Vancouver, the Fraser Valley, select Okanagan, Greater Victoria and Nanaimo. Borrowed equity is not taxable income, but leverage is real risk — the property secures every dollar. Qualification, appraisal and lender appetite decide final numbers — estimates, not commitments.
- Prices BOTH ways out of the equity — break-and-replace to 80% (75% commercial) vs keep-your-first-plus-a-second to 75%/65% — side by side, with a most-cash verdict
- Nets to actual cash in hand: penalty estimate (reusing our penalty engine), our PUBLISHED financing fee schedule, legal and appraisal — not a gross 'you have $X of equity' headline
- Knows the real second-mortgage caps by property type — 75% detached/townhome, 65% condo — for the Metro Vancouver, Fraser Valley, Okanagan, Greater Victoria and Nanaimo markets we place in
- Prints the cost per $100K per month for each path — and when breaking into today's rates actually LOWERS the payment while raising cash, it says so
Get your real mortgage approval amount
Calculators give estimates. We give exact numbers — based on your income, credit, and the lender most likely to say yes. Free, no obligation, same-day reply.
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How much equity can I actually pull out?+
Residential: a new first mortgage to 80% of value, or — keeping your existing first — a second mortgage to 75% combined on detached homes and townhomes, 65% on condos, across Metro Vancouver, the Fraser Valley, select Okanagan markets, Greater Victoria and Nanaimo. Commercial: 75% either way. The calculator nets out the penalty, financing fees, legal and appraisal so you see cash in hand, not a headline number.
Should I break my mortgage or take a second?+
Break when the penalty is small or your current rate is high — the whole balance reprices at today's rates, and sometimes the new payment is LOWER even after pulling six figures. Keep the first and add a second when your existing rate is worth protecting or the IRD penalty is brutal — the second costs more per dollar, but only on the new money. The calculator prices both paths on your exact numbers, including the penalty estimate.
What will it cost me?+
Exactly what our published fee schedule says: a residential A-lender refinance is lender-paid (zero brokerage or lender fee to you) plus roughly $2,500 legal and an appraisal. Alternative firsts and second mortgages carry brokerage and lender fees with minimums on smaller amounts — brokerage from $2,500 residential and $10,000 commercial, private lender fees from about $2,500 residential — always disclosed in writing before you sign anything. The penalty on a break is the other big line — variable is 3 months' interest; fixed can be IRD — and it drops to zero at renewal.
Why can condos only go to 65% on a second?+
Second-mortgage lenders price the risk of being behind another lender, and condos carry extra layers — strata assessments, insurance market swings, building-specific issues — so their combined-LTV cap sits at 65% versus 75% for detached homes and townhomes. A new first to 80% doesn't carry the same distinction.
When is the best time to pull equity out?+
The cheapest time is at renewal: a new mortgage that funds on your maturity date pays no penalty at all, and the switch can be locked in up to 120 days ahead — so if your renewal is on the horizon, run these numbers early and have the money land the day the old term matures. But the best time is when you actually need it: a CRA balance about to become a lien, a deposit deadline, a partner buyout, payroll — those don't wait for a maturity date, and the cost of missing them is usually far bigger than any penalty. That's what the second-mortgage path is for (no penalty, ever), and why the calculator prices a mid-term break honestly — sometimes the penalty is small enough that waiting was never worth it.
Do I pay tax on the money I pull out?+
No. Equity take-out is borrowing against your own asset — it's not income, so it triggers no tax, unlike selling an investment or drawing extra salary or dividends. And when the borrowed money is invested to earn income, the interest can become tax-deductible (that's the foundation of the Smith Manoeuvre). Borrowed money still has to be repaid, of course — tax-free isn't cost-free.
What do people use the money for?+
Clearing CRA balances before a lien lands, consolidating credit cards and high-rate loans, a down payment on the next property or on business premises, buyout of an ex-spouse or partner, renovations, and working capital for a business. What matters to the lender is the story and the exit; what matters to you is the cost per dollar — which is exactly what the two paths compare.
Can builders use this to fund construction?+
It's one of the best uses. Equity pulled from a home, rental or shop walks onto the next project as sponsor equity — funding land deposits, mobilization, overruns and holdback gaps at mortgage pricing instead of construction pricing. It's tax-free to pull, penalty-free when timed to a renewal, and fee-free on residential A-lender files. The construction facility gets smaller and funds faster because the lender sees real skin in the deal.
My income looks small on paper. Can I still qualify?+
If you're self-employed, often yes — stated-income programs qualify on what the business actually earns rather than your deliberately-lean personal T1, at both alternative and private lenders. Salaried borrowers qualify on regular income. Either way, equity strength does a lot of the work on take-out files; placement does the rest.
Related: Your exact penalty, both methods → · True APR of any second → · What your debts really cost → · Our published fee schedule → · Builders: fund construction with equity →