Sometime things happen that require people to refinance, but there simply isn't enough equity in their home to eat up all the debt. CMHC will only allow a person to refinance to 90% of their home's value.

However, there is an alternative. There are some lenders out there that do not use CMHC insurance and therefore they can set their own rules. These "alternative lenders" provide solutions for people who don't fit the CMHC guidelines for various reasons.

Rather than paying a CMHC insurance fee, these lenders charge their own premium similar to CMHC's to cover their insurance. Because lending someone 100% of their property's value is a higher risk, the interest rates are slightly higher, but in many circumstances it is worth it to pay the higher rate and get rid of other lingering debts and lower your overall monthly payments!

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