One of the benefits of owning a home in Canada is the equity you build on your real estate property throughout the years. However, what a lot of homeowners don't know is that they are able to use the equity they build over time to help them lower their monthly payments. But how do you go about doing so? There are several methods that can help provide you with some extra cash in your monthly budget for other financial obligations. Therefore, to learn more about lowering your monthly mortgage payments by strategically using the equity. You've collected it in your home.

How to lower your monthly payments with your home’s equity

As mentioned, there are several methods you can use to lower your monthly payments and have some extra cash in your pocket each month. Let’s take a closer look at these methods in more detail below:

1.    Refinance your real estate with a lower mortgage interest rate

By taking out a cash-out refinance loan, homeowners are able to use the equity in their homes for things like home renovations, repayments on other loans, and more. By doing so, you can keep your savings while putting yourself ahead financially. When refinancing your home using a cash-out refinance, homeowners are able to take out a lower interest rate as well. This means your monthly mortgage payments will also decrease for you and your family.

2.    Extend your mortgage term

If you want to make a lower monthly payment on your mortgage, you can do so by prolonging the term of your mortgage with a new loan or a loan modification. A lengthier mortgage term allows the loan amount to expand across more payment transactions which can provide you with hundreds of dollars in savings a month, depending on what you still owe on your home.

3.    Lower your homeowner’s insurance rate

If you pay for your homeowner’s insurance each month, purchasing a lower homeowners insurance rate may be a simple way to reduce your total monthly premium. To do so, reach out to different insurance companies for quotes. Additionally, don't be afraid to ask for any discounts that may be available to you. Further, ask your insurance company whether there are ways to save money when you bundle your homeowner’s insurance with your auto insurance policies as well. 

4.    Consider consolidating your current debts

If your monthly liabilities include debt payments from various sources, such as credit cards as well as other lines of credit in addition to your home loan, you may want to take into account debt consolidation by deciding to take out another debt consolidation home mortgage loan. This enables you to lower your overall monthly payments because credit card interest rates are typically extremely high in comparison to traditional mortgages or loans. You can investigate this alternative with the assistance of a debt management consultant to see if it reduces your monthly bills.