A client is looking to switch their existing mortgage from Lender A to Lender B. Their current outstanding balance is $350,000, and the property value is $500,000. They are seeking a like-for-like mortgage with a new rate. What is a key advantage of a mortgage 'switch' over a 'refinance' for this client?

Question: A client is looking to switch their existing mortgage from Lender A to Lender B. Their current outstanding balance is $350,000, and the property value is $500,000. They are seeking a like-for-like mortgage with a new rate. What is a key advantage of a mortgage 'switch' over a 'refinance' for this client?

Answer options:

• A. Ability to access additional equity for debt consolidation. ✅ B. Typically lower legal and appraisal costs.
• C. Opportunity to change the amortization period significantly.
• D. Avoiding the mortgage stress test for uninsured mortgages.

Correct answer: B. Typically lower legal and appraisal costs.

Explanation: A mortgage switch (or transfer) generally involves moving the existing mortgage balance to a new lender without increasing the principal amount. This process is typically less expensive as it often avoids full legal fees and new appraisals required for a refinance. A refinance would be needed to access additional equity or significantly alter terms.