What documents will I sign when I refinance a property?

Summary: Refinance documents in Ontario go to your new lender (including the Cost of Borrowing Disclosure Statement) and your lawyer (including the Acknowledgement and Direction for the new Charge and a Direction re Funds). A non-titled spouse may need to consent under section 21 of the Family Law Act.

Which documents do you sign for a refinance?

A refinance replaces or adds to the mortgage on a home you already own. In Ontario, that mortgage is registered on title as a Charge. Because nothing is being bought or sold, the paperwork is shorter than a purchase. Here is a quick reference:

How is refinance paperwork different from a purchase?

Refinance paperwork differs from a purchase because no one is buying or selling. With no seller and no change in ownership, the seller's documents, the Transfer, and land transfer tax usually drop away, and your lawyer pays out your existing mortgage instead.

Ownright's guide to the documents you sign when you purchase a property covers the full purchase set. Here is how the two compare:

What documents does the new lender require?

The new lender requires documents that confirm you understand the loan and that its security is sound. Your lawyer reviews each one with you before you sign:

• Cost of Borrowing Disclosure Statement. Outlines the new loan: principal, interest rate, payment amount and frequency, term, amortization (the total years to pay the loan off), total interest over the term, and any fees, prepayment privileges, and penalties.

• Acknowledgement of Receipt of Standard Charge Terms. Confirms you received the Standard Charge Terms, the lender's filed set of rules for how the mortgage works and what happens on default.

• Statutory declaration. A solemn declaration, made like an oath, confirming facts the lender relies on, such as whether you live in the home, your marital status, and that there are no undisclosed charges or judgments against you.

• Other documents, depending on the file. A pre-authorized debit form for your payments, or an assignment of rents if the property is tenanted, which lets the lender collect rent if payments stop.

What documents go to your lawyer?

The documents that go to your lawyer are the ones that make the refinance happen: they instruct your lawyer to register the new Charge, pay out what you owe, and send you the balance. Unlike a purchase, your lawyer is managing your own money.

Most files start with a Retainer Agreement, which sets out the work your lawyer will do and the fee. If two or more owners hire the same lawyer jointly, it also explains that the lawyer cannot keep information one client shares from the other, and cannot act on conflicting instructions.

Your lawyer also has to verify your identity before acting on a real estate file, as the Law Society of Ontario requires. Expect to show government-issued photo ID, either in person or through a secure online verification step.

Next comes the document that actually secures the new loan:

• The Charge. Records the new lender's interest in your property. It is registered electronically on title through Ontario's land registration system.

• Acknowledgement and Direction. Confirms you have reviewed the Charge as drafted and authorizes your lawyer to register it on your behalf. You do not sign the Charge itself; this document is your signature on it.

Finally, you sign a Direction re Funds, sometimes called a direction regarding the payout of debts. It is the instruction that matters most in a refinance. When the new lender advances the mortgage money to your lawyer's trust account, this document tells your lawyer exactly where it goes:

• Your existing mortgage. Paid out in full, using a payout statement your lawyer orders from the current lender. That statement includes any prepayment penalty if you are breaking the mortgage before its term ends.

• Other debts you are consolidating. Credit cards, a car loan, a line of credit, or property tax arrears, each paid directly to the creditor.

• Legal fees and disbursements. Your lawyer's fee and the registration costs.

• The balance. Whatever is left, sent to you by wire or cheque.

Your lawyer then sends a reporting letter confirming that the new Charge is registered, the old mortgage is paid, and the discharge (the registration that removes the old mortgage from title) is on its way.

Who else needs to sign refinance documents?

Everyone on title signs the refinance documents, and in some cases people who are not on title sign too. Under Ontario's Family Law Act, a married spouse cannot mortgage a matrimonial home without the other spouse joining in or consenting, even if only one name is on title. The rule has limited exceptions, such as a court order, and does not apply to common-law partners.

• A non-titled spouse. Signs a consent to the new Charge so it is valid against the matrimonial home.

• A guarantor. Someone backing the loan, such as a parent. Lenders usually require them to get independent legal advice from a separate lawyer first.

• A co-owner. Every registered owner is a party to the new Charge and signs the Acknowledgement and Direction, even if only one is taking on the new debt.

How do you sign refinance documents?

You sign refinance documents at a signing meeting with your lawyer, which in Ontario no longer has to happen in an office. At Ownright, the meeting happens over a secure video call, and you sign through DocuSign on any device.

1. Your lawyer receives the lender's instructions. The new lender sends its instructions and documents, and your lawyer orders a payout statement from your current lender.

2. You review the documents ahead of time. Your lawyer shares the Cost of Borrowing Disclosure Statement and the payout figures so you can check them before the meeting.

3. You meet and sign. Your lawyer verifies your identity, walks you through each document, answers your questions, and you sign electronically.

4. The Charge is registered and funds are released. On closing day, your lawyer registers the new Charge, receives the mortgage funds, and pays everything out under your Direction re Funds.

Ownright's guide to how signing meetings work in Ontario covers what to bring and what the call looks like.

Frequently asked questions

Do I need a lawyer to refinance my mortgage in Ontario?

Usually, yes. When you add money to your mortgage, a lawyer typically registers the new Charge and pays out the old mortgage. Some lenders handle a straight switch to a new lender through a title insurer instead, and a simple renewal with your existing lender usually needs no lawyer.

Do I pay land transfer tax when I refinance?

No. Land transfer tax applies when ownership changes hands, and a standard refinance only registers a new Charge. It can apply if the refinance also changes who owns the property, such as buying out a co-owner, though some transfers between spouses are exempt.

What is a Direction re Funds?

It is the document that tells your lawyer how to use the new mortgage money. It lists your existing mortgage, any other debts being paid, legal fees, and the account where the balance should be sent.

Does my spouse have to sign if they are not on title?

Often, yes, if you are married and the home is your matrimonial home. The Family Law Act requires a non-titled married spouse to consent before the home can be mortgaged. Your lawyer will confirm whether this applies and add the consent to your documents.

About the author

Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.

At Ownright, we focus entirely on Ontario residential real estate law. Our lawyers prepare and explain every document in your refinance, and our platform lets you track your file and sign securely from home. You can start your closing online or get in touch with any questions.

Legal references: Family Law Act, R.S.O. 1990, c. F.3, s. 21; Land Registration Reform Act, R.S.O. 1990, c. L.4, ss. 8 and 21; O. Reg. 19/99 (Electronic Registration); Land Transfer Tax Act, R.S.O. 1990, c. L.6; Law Society of Ontario By-Law 7.1.

Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.