Paid off a consumer proposal early with home equity — compressed a 5-year term

The proposal had four years to run. Each of those years meant premium (non-prime) pricing on any financing and a delayed return to A-lender eligibility.

The client had ample home equity but no lump sum of cash — so the question was whether the cost of tapping equity was worth the time it would save.

We modelled the payout math carefully: home value, existing first mortgage, the amount to settle the proposal in full through the trustee, and fees — confirming the refinance would leave a healthy equity cushion rather than drain it.

Because the proposal was still active at funding, we arranged a private second mortgage sized to settle it. The proceeds went to the trustee, the proposal completed, and the discharge clock started immediately — compressing a four-year runway into the time it took to close. We set the exit to refinance into A pricing once credit seasons.

Settling early started the discharge clock years ahead of schedule. The premium on the short private second was modest next to four more years of non-prime pricing — and it was only pursued because the equity was ample enough to keep a strong cushion. On a thinner-equity file, the honest advice would have been to wait.