Refinancing vs Selling: How to Compare Your Real Costs
If you're considering a move but also weighing whether to refinance and stay put instead, the two paths have very different cost structures. Here's how to compare them on equal footing.
Refinancing: Stay, But Change Your Mortgage
If you refinance with your current lender or switch to a new one while staying in your home, your main costs are:
- Prepayment penalty, if you're breaking an existing fixed-term mortgage early
- Legal and appraisal fees for the new mortgage registration
- Discharge fee from your current lender
Refinancing doesn't trigger land transfer tax, since you're not purchasing a new property — this is one of the clearest financial advantages of staying versus moving.
Selling and Buying: A Full Transaction on Both Sides
If you sell and buy instead, you're looking at a longer list:
- Mortgage penalty on your current home, if applicable (see our Mortgage Penalty Calculator)
- Real estate commission on the sale, typically a percentage of sale price, split between listing and buying agents
- Land transfer tax on the new purchase (see our Land Transfer Tax Calculator), often the single largest cost in this list for GTA buyers
- Legal fees on both transactions — the sale and the purchase each need their own legal work
- Moving costs
- Everything else covered in our Complete Guide to GTA Closing Costs
A Side-by-Side Framework
Rather than comparing these in the abstract, lay out both paths with real numbers:
Refinance path total = mortgage penalty (if any) + discharge fee + legal/appraisal fees for the new mortgage
Sell-and-buy path total = mortgage penalty + selling commission + land transfer tax on the new purchase + legal fees (both sides) + moving costs
For most scenarios, the sell-and-buy path costs substantially more in transaction costs alone — which makes sense, since it involves two full transactions instead of one. That doesn't mean refinancing is always the better choice; if your current home no longer fits your needs, no amount of refinancing solves that. But it does mean the cost gap between the two options is usually larger than people initially assume.
When Selling Still Makes Sense Despite the Cost Gap
- Your current home genuinely doesn't fit your needs (space, location, life changes)
- You have significant equity to unlock by selling into a strong market
- Staying isn't financially better once you account for renovation costs a refinance-and-improve path would require instead
The Practical Takeaway
Before deciding, run the actual numbers for both paths using your specific mortgage details and target purchase price — the gap between refinancing and moving is usually bigger in dollars than it feels in the abstract, and it's worth seeing the real comparison before committing to either path.
This is general information, not financial advice. Use our calculators to estimate the mortgage penalty and land transfer tax pieces specifically, and speak with a mortgage professional and real estate lawyer to build out the complete comparison for your situation.